TANAP Costs Decrease by 20-25%

Azerbaijan's top oil official says the cost of construction of the Trans-Anatolian Natural Gas Pipeline (TANAP) decreased by 20-25 % cheaper on previous cost estimates.

Head of the State Oil Company of Azerbaijan Republic (SOCAR) Rovnag Abdullayev said on November 10th that the decline of costs is a result of the decreasing price of materials.

First gas transportation via the 1,850-km pipeline is planned to commence in 2018. The pipeline will deliver 6 billion cubic metres (bcm) of gas to Turkey and 10 bcm to Europe (in 2021) annually. By 2023, TANAP's capacity will rise to 23 bcm per year and then to 31 bcm by 2026.

Construction of TANAP started in mid-2015. Abdullayev said that the construction of 50 kilometres of the onshore section of the project would be completed by the end of current year.

The construction of TANAP is now expected to cost $9.5 billion.

Turkish steel pipe producers Toscelik, Borusan Mannesmann, Erciyas Boru, Emek, Umran and Noksel had previously won the tender to supply steel pipes for TANAP in 2014.

According to a contract signed in 2014, the Turkish companies will supply approximately 1.2 million tons of steel pipe for TANAP -- 80 percent of the total -- and earn an estimated $3 billion. China's Baosteel will provide the remainder of the pipes.

TANAP's shareholders are SOCAR (58%), BOTAS (30%), and BP (12%).