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    Caspian Overview: Tap Turn-off for Iran

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Summary

The inauguration ceremony of the last part of Southern Gas Corridor (SGC) started on May 17, in Thessaloniki, Greece.

by: Azerbaijan desk

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Top Stories, Weekly Overviews, Security of Supply, Energy Union, Corporate, Exploration & Production, Import/Export, Political, Ministries, Regulation, Caspian Focus, Infrastructure, Pipelines, Trans-Adriatic Pipeline (TAP) , News By Country, Azerbaijan, Greece, Iran, Iraq

Caspian Overview: Tap Turn-off for Iran

The inauguration ceremony of the last part of Southern Gas Corridor (SGC) started on May 17, aimed at exporting 10bn m3/yr of Azerbaijani gas to EU initially by 2021, while Europe eyes double this volume in future, even if it means taking gas from other sources, including Turkmenistan and Iran.

Both Caspian littoral countries have demonstrated their interest to deliver gas to SGC, but without any serious talks, let alone taking steps.

Azerbaijan has plans to inaugurate new fields, including the third stage of Shah Deniz in 2030s.

Attending the TAP inauguration, the EU's Energy Union Commissioner Maros Sefcovic said the line would "allow many countries, including in central and southeast Europe to diversify their sources of gas. The Southern Gas Corridor will be vital for reaching the Energy Union objectives of diversification of sources, routes and energy security. Therefore timely completion is crucial so that gas from the new suppliers can flow to Europe by 2020."

Coming to Iran as the world's biggest gas reserves, the country hopes to export 300-350mn m3/d of natural gas by 2025.

Iran prefers to export LNG to EU rather than pipeline gas, but Tehran hasn't refused the possibility of gas export through SGC and Islamic Pipeline project, which has been designed to export gas through Iraq and Syria to EU.

For now a pipeline runs from Iran's border to Baghdad and the gas deliveries are projected to start in July in restricted amount. After completing the sixh cross country pipeline, linking Iran's giant South Pars gas field to the borders with Iraq, Iran would boost the export level to Baghdad to 25mn m3/d, while the capacity of this pipeline is 100mn m3/d.

Iran plans to restart work on an LNG plant, developed by 50%, to produce 10mn mt/yr of liquefied gas, which equals around 14bn m3/yr.

Coming to Azerbaijan, the state statistical committee reported this week that the country's total raw and commercial gas production level reached 9.935bn m3 and 6.296bn m3 during the first four months of 2016.

The country's tank gas (commercial gas) production experienced a 9.8% decrease year-to-year over that period.

State Socar told NGE that since early year, BP-Azerbaijan has pumped more associated gas into the oil wells on the offshore bloc Azeri-Chirag-Guneshli (ACG). "Thanks to that, the first quarter of  2016 the international consortium managed to extract the same volume of oil as it produced from January to March last year (59mn barrels)."

In 2015 gas production in Azerbaijan totalled 29.7bn m3, including 19.7bn m³ of commercial gas.

In 2016 the Azerbaijani government forecasts oil production at 40.75mn mt and 29.35bn m3 of raw gas.