TANAP and BP: successful tandem

By: Emil Ismayilov

The Trans-Anatolian gas pipeline (TANAP) is one of important components of the Southern Gas Corridor, designed to diversify gas supplies to Europe. Moreover, the gas pipeline will strengthen Turkey’s energy security.

The transaction on BP’s purchase a 12 percent stake in the project from SOCAR (State Oil Company of Azerbaijan) will be formalized by late 2014. This testifies to the importance of the ultimate goal of TANAP construction.

Afterwards, the TANAP shareholders will be as follows: SOCAR – 58 percent, Botas – 30 percent, BP – 12 percent.

For more than 20 years British BP has been a reliable partner of Azerbaijan in the energy sector. It is involved in such large projects as the development of the block of oil and gas fields Azeri-Chirag-Guneshli and Shah Deniz gas condensate field. The British company is a member of the consortiums of the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus gas pipeline.

All these projects have gained worldwide fame. In particular, the second phase of the Shah Deniz development is being implemented. Southern Gas Corridor will be opened by this gas. Along with the TANAP construction, “Southern Gas Corridor” involves the expansion of the South Caucasus pipeline and the construction of the Trans-Anatolian gas pipeline (TAP).

BP’s joining TANAP testifies to the confidence in this huge project and creates a basis for its implementation. The initial capacity of the pipeline is expected to reach 16 billion cubic meters of gas per year. About six billion cubic meters will be delivered to Turkey, and the rest – to Europe.

In the future, the pipeline can be expanded up to 31 billion cubic meters per year. TANAP pipeline is planned to be commissioned in 2018. The project cost is estimated at $10-11 billion.

Thereafter, gas will be delivered to Turkey in 2018 and after completing the construction of TAP, gas will be delivered to Europe about in early 2020. The cost of the work on all four elements of the Southern Gas Corridor is estimated at almost $50 billion, according to the preliminary data.

The work within the construction of TANAP is in a sufficiently active phase. Contracts for the supply of pipes for the construction of TANAP were signed in Turkey’s Ankara city on Oct.14 with six Turkish and one Chinese company which became the winners of the earlier announced tender.

The winners of the tender were Turkey’s Mannesmann-Noksel-Erciyas and Umran-Emek consortiums, Toscelik Profil ve Sac Endustrisi company, as well as a Chinese contractor Baosteel Europe.

Determination of contractor for the construction work is under the tender procedure. The tender is being held for three lots which cover the participants from the border with Georgia to Erzurum, from Erzurum to Sivas and from Sivas to Eskisehir.

The contracts for carrying out the construction work will be signed in the near future and later the agreement on the supply and construction of compressor stations will be inked. The pipelay operations will start in early April 2015.

Although the export volumes are not so large by European standards, there are great prospects for increasing these volumes.

For instance, BP itself is a participant of the contract for the exploration and development of the prospective Shafag-Asiman gas and condensate block. There are also plans for the development of Absheron, Umid fields, as well as the prospective structures such as ‘Babak’, ‘Nakhchivan’ and others.

There are also opportunities for Middle East, Mediterranean and Central Asian gas supply sources to join the Southern Gas Corridor.

Despite the sufficiently large volume of the work, Southern Gas Corridor will become a reality.

Close cooperation of the interested parties, strong and reliable partnership relations will make significant contribution to its development like other energy projects implemented in Azerbaijan. And this is the keystone to success.