Azerbaijan to Revive LNG Export Project to EU
Several days after the Azerbaijan-Georgia-Romania Interconnector (AGRI) Board of Directors held a meeting in Romania, the head of State Oil Company of Azerbaijan (SOCAR) announced on December 8th that the AGRI project “may become one of the infrastructure projects that will allow Azerbaijan to transport its large reserves of gas on the markets.”
AGRI is the first LNG project to be developed in the Black Sea, aiming the transport of natural gas from Caspian region to Europe. The project is expected to transport liquefied Azeri gas from Georgia, across the Black Sea, to a LNG terminal to be built on the Romanian Black Sea Coast.
From that point, natural gas will be transported via the Romanian natural gas transmission system to Hungary, through the Interconnector between Romania and Hungary (Arad-Szeghed) and finally on to Europe.
SOCAR CEO Rovng Abdullayev told reporters in Baku that all projects have a right to exist though the Southern Gas Corridor, which is currently underway, is of primary importance as it has great potential for expansion.
He said that if the market demands it, each of the projects can be considered anew.
The cost of the project will vary from €1.2 billion to €4.5 billion, according to the preliminary estimates. This will depend on the capacity of terminals that could be equal to 2 to 8 billion cubic meters of gas per year.
With the exception of Russia, only Turkmenistan has a restricted amount of liquid natural gas (LNG) production capacity.
Turkmenistan has built an LNG terminal at Kiyanly on the Caspian Sea with 200,000 tons of production capacity in 2009.
According to the schedule published on the project website, the General Assembly of AGRI Shareholders is to discuss the results of the Feasibility Study from January-February 2015.
Shareholdings of AGRI are as follows: SOCAR 25%, GOGC 25%, ROMGAZ 25% and MVM 25%.
It is not clear whether Turkmenistan is determined to take part as the gas supplier for AGRI or not, but Turkmen President Gurbanguly Berdymukhamedov made announcement during his visit to Romania in May 2011 that his country is seeking participation in AGRI project "at a high level."
It is also unclear whether the AGRI project, with high costs and restricted transmission capacity, would able to compete with the Trans Adriatic Pipeline, aimed at delivering 10 bcm of Azerbaijan’s gas annually to Europe in its first stage.