The purpose of the "Southern Gas Corridor" is to ensure the development of the second stage of the Shah Deniz gas condensate field and firstly, the export of natural gas to Turkey and then Southern Europe through the extended South Caucasus Gas Pipeline, TANAP and TAP.

The second stage of the full-scale development of the Shah Deniz project- the Shah Deniz Stage 2 project, which is a giant project to deliver Azerbaijani gas to Europe and Turkey will supply gas to European markets through the Southern Gas Corridor, improving the energy security.

The main elements of the Southern Gas Corridor project are:

Full-scale development of "Shah Deniz" gas condensate field

Expansion of the South Caucasus Pipeline (SCPX);

"Trans Anatolian Natural Gas Pipeline" (TANAP) project

Trans-Adriatic Pipeline (TAP) project

In 2011, the EU and Azerbaijan signed a Joint Decleration supporting the development of direct gas routes from the Caspian to Europe. The Joint Decleration, together with Intergovernmental Agreements on TANAP and TAP, paved the way for long-term gas sale contracts. On June 27, 2012, President of the Republic of Azerbaijan Ilham Aliyev and Turkish Prime Minister Recep Tayyip Erdogan signed an agreement on TANAP. On September 20, 2014, the foundation of the Southern Gas Corridor was laid. On March 17, 2015, a groundbreaking ceremony for TANAP was held in Kars, Turkey, and construction of the pipeline began. The groundbreaking ceremony for TAP was held on May 17, 2016 in Saloniki, Greece, and construction of the pipeline began. The Southern Gas Corridor was inaugurated on May 29, 2018 in Baku, and the Trans-Anatolian Pipeline (TANAP), an important part of this corridor, was inaugurated in Eskişehir on June 12. On June 30, 2018, the first commercial gas was transported to Turkey through the Trans-Anatolian (TANAP) pipeline. On November 30, 2019, the inauguration ceremony of the part of the TANAP gas pipeline connecting Europe was held. The supply of Azerbaijani natural gas to the European market through TAP started on December 31, 2020.

The total value of the Southern Gas Corridor is 40 billion USD .

 

Full-scale development of "Shah Deniz" gas condensate field

"Shah Deniz Stage 2" is a giant project that will produce another 16 billion cubic meters (bcm) of gas in addition to 10 bcma gas produced by "Shah Deniz Stage 1" project per annum. Shah Deniz gas will rise 2500 meters high and descend 800 meters down the bottom of the sea, being transported along 3500 km.

A Production Sharing Agreement was signed on 4 June 1996. The field was commissioned in 2006.

 

The project includes the following works:

· installation of two bridge-linked offshore platforms;

· drilling of 26 gas production wells with two semi-submersible rigs;

· the laying of 500 km of subsea pipelines, which will connect subsea wells and the onshore terminal;

· upgrade of the installation vessels;

· expansion of Sangachal Terminal for new gas processing and compression facilities.

· Initial balance reserve of gas and condensate: more than 1 trillion bcm and more than 2 billion barrels of condensate;

· Shareholders: BP - 29.99%, Lukoil - 19.99%, TPAO - 19%, SOCAR - 14,35%, NICO – 10%, SGC – 6,67%.

Work on the Shah Deniz Stage 2 project to obtain the first gas has been 100% completed. Equipment and facility development by the end of 2021 exceeded 98%;

Expansion of South Caucasus Pipeline (SCPX) project

Main technical-economic indicators of the project:

· Launch of SCPX: 2006;

· Length of SCPX pipeline: 691 km in general, 443 km in Azerbaijan, 248 km in Georgia;

· Length of SCPX pipeline: 424 km in Azerbaijan, 63 km in Georgia and 2 km in TANAP interconnection;

· Transmission capacity: 7.4 bcm per annum As a result of the expansion, the transmission capacity of the pipeline is 16 bcm per annum. Annual transmission capacity can be increased to 31 bcm if required;

· Shareholders: BP as an operator (29,99%), SOCAR (14,35%), SGC (6,67%), Lukoil (19,99%), NICO (10%) and TPAO (19%).

During 2018, works on SCPX were successfully continued along the pipeline route in Azerbaijan and Georgia. On the first gas and the overall development is 100%.

 

"Trans Anatolian Natural Gas Pipeline" (TANAP) project

Main technical-economic indicators of the project:

· Pipeline length: 1850 km;

· Date of commissioning: 2019;

· Initial transmission capacity: 16.2 bcma (expandable to 30.7 bcma);

· Shareholders: SGC (51 %), BOTAS (30%), BP (12%), Socar Turkey Energy (7%).

The transportation of the first gas volumes to Turkey through the TANAP pipeline began on June 30, 2018. Starting from the Posoph settlement of Ardahan and passing through 20 cities, 67 settlements and 600 villages along the territory of Turkey and reaching Europe in Ipsala settlement of Edirne, the 1850-km pipeline has been ready to transport Azerbaijani gas to Europe via the Trans-Adriatic Pipeline (TAP) on the Turkish-Greece border since July 1, 2019. On November 30, 2019, in Ipsala settlement of Edirne province, Turkey, President Ilham Aliyev attended the opening ceremony of the TANAP gas pipeline linking Europe.

Trans-Adriatic Pipeline (TAP) project

Main technical-economic indicators of the project:

· Length of the pipeline: 880,8 km (Greece-551.5 km, Albania – 215.9 km, Adriatic Sea – 105.0 km, Italy – 8.4 km);

· Date of commissioning: 2020;

· Initial transmission capacity: 10 bcma (expandable to 20 bcma);

· Shareholders: BP (UK) - 20%; SGC-20%; Snam (Italy) - 20%; Floxys (Belgium) - 19%; Enagas (Spain)- 16%; Axpo (Switzerland) - 5%;

· Natural gas production from the Shah Deniz field is projected to reach 27 bcm in 2025;

· Under the agreements on the sale of gas through TAP to European buyers in 2021, 8.15 bcm natural gas was transported.

TAP project as one of the key elements of the ”Southern Gas Corridor" was built to transport Caspian gas to Europe. Currently, the TAP pipeline is filled with natural gas from the Greek-Turkish border to the south Italian natural gas receiving terminal.On 15 November 2020, the Trans-Adriatic Pipeline (TAP) was put into operation and was ready to start commercial activities. On 31 December 2020, Azerbaijan began to supply commercial gas to Europe via TAP. In March 2022, a total of 10 billion cubic meters of natural gas from Azerbaijan entered Europe through the Trans-Adriatic Pipeline (TAP).

Southern Gas Corridor Advisory Council

The State Commission was established  by Order No. 15 of the President of the Republic of Azerbaijanon dated 29 October, 2013 “on measures related to the transportation of Azerbaijani natural gas to the world market along the Southern Gas Corridor”. Order No. 287 “On relevant measures related to the second stage of the operation of Shah Deniz gas-condensate field and establishment of the Southern Gas Corridor with regard to other projects” dated 25 February 2014 was signed. The initiative to establish Advisory Council of energy ministers of the countries involved in the implementation of the Southern Gas Corridor project was put forward by President of the Republic of Azerbaijan Ilham Aliyev. The Ministry of Energy of the Republic of Azerbaijan has been assigned the implementation of activities related to the organization of the Advisory Council.

It should be noted that the first Ministerial Meeting was held on February 12, 2015, the second meeting on February 29, 2016, the third meeting on February 23, 2017, the fourth meeting on February 15, 2018, the fifth meeting on February 20, 2019, the sixth meeting on February 28, 2020 and the seventh meeting on February 11, 2021 within the Southern Gas Corridor Advisory Council.

 

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