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Estimated Price of Shah Deniz Stage 2 up to $28 billion, SOCAR President Says

The cost of the Shah Deniz Stage 2 project is now estimated slightly higher than previously at $28 billion, SOCAR President Rovnag Abdullayev has said.

"We plan to implement scaled projects, one of which is the implementation of the stage 2 project. Within the project, we will also start broadening of the South Caucasus pipeline in the territory of both Azerbaijan and Georgia," he added.

Beforehand, the project was priced between $20-22 billion.

Shah Deniz Stage 2 will bring gas from the Caspian Sea to markets in Turkey and Europe, opening up the Southern Gas Corridor. The progress made to date allows the consortium to maintain its target for the first gas exports from Stage 2 sometime at the end of 2017.

Shah Deniz Stage 2, or Full Field Development (FFD), is a project that will add 16 billion cubic meters per year (bcm) of gas production to the approximately 9 bcm produced by Shah Deniz Stage 1.

Over $25 billion capital investment will be required to produce the gas and pipe it to the Turkish border. From there, additional pipeline systems are planned to deliver 6 bcm of gas to Turkey and other 10 bcm of gas to markets in Europe.

Shah Deniz Stage 2 - one of the largest gas developments in the world - will help increase energy security for European markets through the opening of the new Southern Gas Corridor.

Export of gas from this project will follow the same route as the current South Caucasus Pipeline (SCP) through Azerbaijan and Georgia. In Turkey, the gas will be transported through either the existing transmission network or a new Trans-Anatolian-Pipeline (TANAP).

The Shah Deniz consortium is currently considering two export routes for transportation of gas further into Europe. The first option, Nabucco West, is planned to run from the Turkish-Bulgarian border to Bulgaria, Romania, Hungary and Austria. The second option is the Trans-Adriatic Pipeline (TAP), which will bring the Shah Deniz Stage 2 gas through Greece and Albania to Italy.

The Shah Deniz consortium aims to make a final decision on these options and on related gas sales agreements before the project's final investment, which is planned for mid-2013.

Source: AzerTAc

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