Turkey Will Not Increase its Stake in TANAP, Yildiz Says
Turkey does not plan to increase its stake in Azeri-Turkish Trans Anatolian Natural Gas Pipeline Project (TANAP), Turkish Energy Minister Taner Yildiz said. In the sidelines of a signing ceremony of SOCAR's Star Refinery's $3.3 billion credit in Istanbul, Yildiz stated that Turkey will keep its 30% stake in TANAP. "The share in TANAP is sufficent for Turkey. We're not planning to change our share in TANAP before it become operational in 2018."
In late last month, Energy Minister Taner Yildiz and Azerbaijani Energy Minister Natig Aliyev signed an agreement in Istanbul on increasing Turkey's share in the TANAP project up to 30%. Azerbaijan's State Oil Company (SOCAR) sold 10% out of its 80% share to the Turkish state-owned BOTAS pipeline company. Following deals with BP - largest shareholder in Shah Deniz - and BOTAS, the stake of SOCAR in TANAP will stand at 58%.
In early May, SOCAR's CEO Rovnag Abdullayev said that the company may decrease its stake in TANAP from 58% to 51% gradually in foreseeable future. He did not give further details about the intention.
Initial capacity of the pipeline is expected to be 16 BCM per year. About 6 BCM of natural gas will be delivered to Turkey and the rest to Europe. The pipelines capacity can be further expanded to 31 BCM of natural gas per year.
TANAP shareholders plan to lay the pipeline's foundation in the second quarter of 2014 and commission it in 2018. TANAP project cost is estimated to be between $10 billion and $11 billion.
The implementation of the Shah Deniz development project and the TANAP project will increase the pipeline's importance for European natural gas consumer countries. Shah Deniz is among the largest gas fields in the world, with nearly 1.4 TCM of natural gas. Apart from Azerbaijan, gas extracted from the Shah Deniz field is exported to Georgia and Turkey.
Shah Deniz I has been pumping gas since 2006 and has an annual production capacity of about 10 BCM of natural gas. The gas to be produced in the second phase of the Shah Deniz field's development will be exported through expansion of the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).
The route is a strong alternative for Europe to cut its dependence on Russian imported natural gas. Currently, the EU imports more than one third of its natural gas needs via pipelines across Ukraine.