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Historic Signing of Shah Deniz 2 Project - Azerbaijan Becomes the Major Gas Supplier to Europe

Backers of Azerbaijan's Shah Deniz II gas project signed a multibillion-dollar deal today, paving the way for a huge field in the Caspian to provide fourth major route for gas flows to European market.

Taking gas from Azerbaijan will open a new source of gas supply into southern Europe on top of the existing pipelines from Norway, Russia and Algeria – diversifying supply and reducing Europe's dependence on Russia.

At the signing ceremony witnessed by European Prime Ministers and Foreign Secretary William Hague in capital Baku, President of Azerbaijan Ilham Aliyev stated that the project extension "will change the energy map of our region and help the historical development of our country".

The documents signed in Baku include an investment decision on Shah Deniz II, as well as the Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipeline projects. Combined, the projects will cost $35 billion, President Aliyev said.

The equity of SOCAR and BP in the project will be increased to 16.7 and 28.8 percent respectively.

The project will see 10 billion cubic meters annually (BCMA) of gas supplied to the European market. Under $100 billion of supply agreements spanning 25 years, Italy will take 8 BCMA, with one each for Greece and Bulgaria. Turkey is taking a further 6 BCMA.

Source: Various Sources

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