Tanap Secures $365m of New Loans

The Asian Infrastructure Investment Bank (AIIB) approved a $219.5 loan for the Trans Anatolian Natural Gas Pipeline (Tanap) on April 5, the Southern Gas Corridor joint stock company (SGCC) has told NGW.

World Bank subsidiary International Bank for Reconstruction and Development (IBRD) approved a $146.3mn loan for Tanap March 30, SGCC added. The two loans totaling $365.8mn are to be spent on Tanap, which will cross Turkey, and in which Azerbaijan’s stake is 58%.

This is the second loan package by the two banks this year for SGCC, the latter said: “The banks allocated $108.4mn and $162.6mn in February."

Before that, under a World Bank’s executive board decision, IBRD had allocated a $400mn loan to SGCC in October 2016 and AIIB also had approved $600mn loan in December 2016. Both were 30-year loans guaranteed by the Azerbaijani government.

SGCC’s expenditures for Tanap are expected to be $6bn. Over 75% of the work on the Tanap phase-0 (running from the Turkish-Georgian border to Eskisehir) project for the delivery of Azerbaijani natural gas to Turkey has been completed, Tanap director general Saltuk Duzyol said in early March.

Tanap in the context of the Southern Gas Corridor (Map credit: Tanap)

Tanap shareholders are Azerbaijan's state-owned Socar 58%, Turkish state Botas 30% and BP 12%. Tanap is the 1,850-km Turkish part of the overall 3500-km Southern Gas Corridor project that aims to transit 16bn m³/yr od Shah Deniz gas to Turkey next year and Europe by 2021. 

By 2023, Tanap's capacity will rise to 23bn m³/yr and then to 31bn m³/yr by 2026.

Beijing-based AIIB said late March that its total loans to date to all projects had topped $2bn; at the same time it announced a $60mn loan to fund a Bangladesh gas project which will help balance supplies from domestic offshore gas production with future regasified LNG imports.

Azerbaijani Desk