Two Ends of Southern Gas Corridor Work Way towards Centre
Work has been done now at either end of the Southern Gas Corridor, bringing nearer a new source of gas for the European Union. While the subsea construction vessel (SCV) Khankendi was recently floated on the Caspian Sea, the EU was welcoming "a major asset in European energy security tool box" – the TransAdriatic Pipeline (TAP).
Khankendi was specifically designed and built to install the subsea structures of the giant Shah Deniz Stage 2 (SD-2) gas development project, BP reported on May 18. The launch follows the safe transportation of the vessel’s hull strips from Singapore to Azerbaijan and their successful integration with bow blocks built at the Baku Shipyard on the Caspian.
And a few thousand miles away, the Greek section of TAP was inaugurated in Thessaloniki, May 17, in the presence of one of its backers, the European Commission (EC), which granted it the status of a EU project of common interest. This makes it easier to build than other projects, such as the much larger Nord Stream 2 project, backed by six major European gas companies (including Gazprom in that number).
Khankendi is four-fifths complete and is on track for full completion by April 2017 when SD-2 subsea construction activities are due to start. Until that time the vessel will be docked at the shipyard quay for completion of the remaining construction and commissioning activities, the report added.
BP’s regional president for Azerbaijan, Georgia and Turkey, Gordon Birrell, said: “The launch of the vessel out of the dry dock at the Baku Shipyard is an important milestone achieved by Shah Deniz Stage 2 project. The Shah Deniz consortium is proud to be involved in the construction of the Khankendi, which, we believe, marks a new era in the shipbuilding history of not only Azerbaijan but also the entire Caspian region."
He added that this flagship of the Caspian oil and gas fleet is designed to construct world-class subsea structures for the first time in the Caspian to a water depth of up to 550 metres. "We look forward to the full completion and commissioning of the vessel when it will be deployed to the Shah Deniz area to commence subsea installation works for the Stage 2 gas development project”.
Khankendi is planned to perform subsea construction activities on the Shah Deniz field between 2017 and 2027. The $378mn ship is built under DNV GL’s (Norway and Germany) classification supervision.
SD-2 'is not enough' – EC
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."
Initially, some 10bn m³/yr will flow along the Southern Gas Corridor route when it opens in 2019-2020. Given the potential supplies from the Caspian region, and in the future potentially also from the Middle East, and the East Mediterranean, the EU however aims to increase this volume in the long-term, it said in a statement. The aim is for it to carry 20bn m³/yr to Europe, the EC told NGE May 18, but giving no timeframe.
No countries have been formally identified as sellers of specific volumes for later stages. A year ago, in May 2015, the EC organised the Ashgabat Declaration which united Turkey, Turkmenistan, Azerbaijan and the EU in a statement that recognised the importance of equal and mutually beneficial cooperation in ensuring reliable natural gas supplies from Turkmenistan to Europe. They said that it was "necessary to facilitate joint efforts for the preparation of the draft of a legal Framework Agreement on natural gas supply from Turkmenistan to Europe."
Azerbaijan Desk, with William Powell in London