SOCAR Takes Over Shah Deniz Gas Sales
State energy company of Azerbaijan SOCAR has taken over as operator of Azerbaijan Gas Supply company (AGSC), assuming the role of selling gas from Shah Deniz field in Caspian to customers.
ACGS currently sells gas from Shah Deniz – 1 to Azerbaijan, Georgia and Turkey and will handle future gas sales from Shah Deniz-2 to European Union through the Southern Gas Corridor.
The replacement was finalized on Friday after Norway’s Statoil, a former commercial operator for Shah Deniz, completed its earlier announced transaction with Malaysia’s Petronas.
The sale involved the transfer of Statoil’s 15.5% participating interest in the Shah Deniz PSA and similar share in the South Caucasus Pipeline Company (SCPC) and in the SCPC holding company as well as 12.4% share in AGSC.
The realization of the transaction took three years of talks with Shah Deniz partners, according to those close to negotiations. “There were a lot of doubts of SOCAR capabilities to become Shah Deniz commercial operator and manage sales operations, ” the sources said.
SOCAR’s president Rovnag Abdullayev said the transfer of operatorship of AGSC and commercial operatorship of SCPC to SOCAR is “a very important milestone and s a clear recognition by global leading energy companies of its tremendous achievements.”
He expressed his gratitude to Statoil for making this transfer as smooth as possible at the final document signing ceremony in the company headquarter in Baku .
AGSC is a company incorporated in the Cayman Islands, as a limited liability company, and head office in Azerbaijan capital.
A new position as head of gas sales entity from Shah Deniz will not affect SOCAR’s future plans in Europe gas market, the company vice-president Elshad Nasirov said.
“There will not be any conflicts or violation with the terms of the Third Energy Package. SOCAR will sell Shah Deniz’s gas on behalf of the partners,” commented Nasirov.
Issues around compliance with the Third Energy Package have already stalled SOCAR’s deal with Greece for acquisition of a 66 percent interest in the Greek gas transmission operator DESFA.
As SOCAR head Abdullayev said earlier, the decision delayed from November 2014, is now pushed backed further to the end of this year.
“The approval of the transaction for DESFA by European Commission has been extended till the end of the year,” - Abdullayev said, adding that SOCAR’s representative is working closely with appropriate EU authorities.
Kama Mustafayeva