TANAP Construction to Commence in April

In advance of the upcoming inauguration ceremony of the Trans-Anatolian Natural Gas Pipeline (TANAP), Natural Gas Europe had the opportunity to receive the views of Magsud Mammadov, Director for External Relations of TANAP at the sidelines of the Adriatic Oil and Gas conference recently held in Budva, Montenegro.

The pipeline, with an estimated cost of $10-$11 billion, will carry approx.16 billion cubic metres (bcm) of gas annually from the second phase of Azerbaijan's Shah Deniz field (SD2) in the Caspian Sea, one of the world's largest gas fields, which is being developed by a BP-led consortium.

"It is expected the pipeline will be completed by the end of 2019 in order to start deliveries of gas from Shah Deniz II to Europe in 2020", commented Magsud Mammadov.

Mr. Mammadov relayed that TANAP will also have the capacity to welcome other suppliers, which would benefit the European energy market.

What is timeline for TANAP to be constructed and to allow deliveries of gas from Shah Deniz 2 to European customers?

The construction period will last four years. We are starting with construction in April 2015 and first phase will end at 2018. That year, six billion cubic meters of gas will be delivered to Turkey and in 2019, TANAP will be ready to deliver 10 billion cubic meters of natural gas to Europe. 

Will TANAP change the energy map of Europe?

This is a pipeline which is going to become an initial stab into Europe.  In what sense? In a sense that it is going to be a initiative pioneer which will create the way and encourage other suppliers to reach European gas market. If we think of it as highway, this is just the first lane.

Can you discuss the level of co-operation between Turkey and Azerbaijan in the development of TANAP?

Cooperation between Turkey and Azerbaijan is on the highest level. Through this project, it has been shown that the two sides has been very supportive to each other, proven by the series of agreements which the two states have signed, the good level of cooperation between the governments and the good level of cooperation between the domestic companies.

As you know, TANAP will be operated by SOCAR, which currently holds 58% stake in the project. Turkey's pipeline operator BOTAŞ own 30%, while BP committed to acquire 12% in the project, but this has still to complete (see related article). The TANAP project company will be headquartered in Ankara, Turkey.

Turkey plans to develop the project called Turkish Stream to deliver Russian gas to the Turkish-Greek Border.  How does this impact TANAP?

We do not think that this project will be impacting TANAP because this proposal was announced in December 2014, and the TANAP project has already been ongoing for about two years - a lot of work is already done. Therefore, we do not think it will be effect TANAP.  The other thing is our buyers are already known who are committed to buy gas from TANAP.

Does that mean that you already have contracts in place for the gas you will supply?

Yes, that is correct.

How can TANAP assist with providing gas supply to the Balkans?

It is a good thing that TANAP is going to join with the Trans-Adriatic Pipeline (TAP) from which one of the Balkan counties, Albania, will benefit. By that I mean infrastructure, work places and everything that goes with it. There is also Ionian Adriatic pipeline which is planning to be built through Croatia and other countries. That means that the Balkan region can benefit from TANAP.  Balkan countries will not only have access to a new gas source, but also benefit from transit fees and pave the way for further development of interconnectors in the region. But let me just say that these projects are also in the best interest of European Union and its energy policy and the EU can play a key role in the creation of the projects.

Are there plans to expand TANAP?  Which countries other than Azerbaijan can potentially supply TANAP with its gas reserves?  Does that mean building of new pipelines in order to connect with TANAP and if yes, will the TANAP project provide financial help to planned and prospective branch pipelines?

I can tell you about the potential suppliers of TANAP, rather than potential expansion of it. The negotiations with Turkmenistan gas about supplying TANAP are still ongoing. The Iraqi gas in the northern region can potentially be an exporter to TANAP gas. If you look at the recent developments in natural gas exploration in the Eastern Mediterranean area, those reserves can be shipped via TANAP.  All this means that more gas can be delivered in Europe. In terms of delivery, The maximum capacity of TANAP is aimed to reach up to 31 billion cubic meters.

Europe has seen plans for the two major gas project, NABUCCO and South Stream collapse just two years. Should we be skeptical of TANAP's success?

I think it is opposite. If there is a pipeline project that is going to succeed, then it is going to be TANAP. It is because everything is going on schedule so far, we are ongoing in the construction process, we already have the contractors.

One of the best things about TANAP is that it is passing through six countries. That corridor is actually bringing together those six countries and eleven companies to work together. The Turkish Prime Minister has said that TANAP is a project of peace.  While sometimes it is not easy to bring even two countries together for economic cooperation, this project has seen six countries collaborating. TANAP is a project from which natural gas rich reserves of the countries of the east of the project, will meet with gas importing countries in the west.

Related Article: BP's Next Step Towards TANAP