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Plunging oil price cut cost of Southern Gas Corridor project — Azerbaijani Energy Ministry

June 02, 2016, 19:15 UTC+3 BAKU

The current cost of the project is around $40 bln versus $45 bln announced earlier

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© AP Photo/ Tefken

BAKU, June 2. /TASS/. Plunging oil prices cut the cost of the Southern Gas Corridor project aimed for delivering Azerbaijan’s gas to Europe, the country’s Energy Minister Natig Aliyev said Thursday.

"The decline of global oil prices has cut the cost of the Southern Gas Corridor project," he said, adding that currently the cost of the second stage of the Shah Deniz field’s development is estimated at $23.8 bln. The sum includes the expansion of the South Caucasus Pipeline’s capacity worth $4.9 bln. Earlier the total cost of those two segments was estimated at $25 bln.

According to Aliyev, the cost of another segment of the project - the Trans-Anatolian pipeline is currently estimated at $9.3 bln (earlier $11 bln) while the cost of the Trans-Adriatic pipeline - at $6 bln, which means the current cost of the project is around $40 bln versus $45 bln announced earlier.

The Southern Gas Corridor is a system of existing gas pipelines and those under construction, which, after the modernization, should link the European Union with the Caspian region. It includes the South Caucasus pipeline, the Trans-Anatolian pipeline and the Trans-Adriatic pipeline. The Southern Gas Corridor passes through Azerbaijan, Georgia, Turkey, Greece, Albania and Italy. The offshore block Shah Deniz -2 in the Caspian Sea is considered to be the main source of gas for it. However, if the Trans-Caspian pipeline is incorporated into the project, an opportunity will emerge to transport the Turkmen gas along the Southern Gas Corridor. It is planned to export 16 billion cubic meters of gas per year through the pipeline, including 6 billion - in Turkey, 10 billion - in Europe.

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