• Natural Gas News

    BP’s Next Step Toward TANAP



UK's BP has signed a Shareholder agreement for Trans Anatolian gas pipeline considered as a milestone that would enable BP to become shareholders in TANAP.

by: Kama, photo Anadolu agency

Posted in:

Natural Gas & LNG News, Top Stories, Pipelines, Security of Supply, Trans-Anatolian Gas Pipeline (TANAP) , News By Country, Azerbaijan, Turkey, Caspian Focus

BP’s Next Step Toward TANAP

UK’s energy major BP, the lead in the giant Shah Deniz development in Azerbaijan, has made a long waited next step towards becoming a partner in the Trans Anatolian Natural Gas Pipeline (TANAP).

The $11 billion TANAP  is part of the Southern Gas Corridor, which plans to carry natural gas from the Caspian Shah Deniz 2 field to Europe through Turkey.

In the ceremony held on Friday in Ankara, BP, the Azerbaijan-state run oil company SOCAR and the third partner Turkish gas monopoly Botas signed a Shareholder Agreement for TANAP.

Gordon Birrell, General Manager of BP's Azerbaijan unit, said that Turkey will become a major regional energy hub in the next 5-10 years. "The partnership in TANAP project is an important step for BP," he said in the ceremony.

TANAP is a critical part of the Southern Gas Corridor project which will transport Caspian gas to European markets for the first time. The Southern Gas Corridor offers Europe a new source of gas as domestic supplies fall and brings an opportunity to diversify its energy mix, she added.

The final deal has to be signed yet after “resolving all technical issues”, the sources in TANAP company said.  

“Following the signature of the Shareholder Agreement  today, BP is looking forward to completing all other agreements that would enable BP to become shareholders in TANAP”, BP Azerbaijan spokeswoman Tamam Bayatly told Natural Gas Europe commenting on the issue.

With Friday’s agreement, SOCAR will hold 58 percent, BOTAS keeps earlier agreed 30 percent and BP will own a 12 percent stake in TANAP after finalizing the other requirements.

“TANAP has faced many political and economic obstacles throughout its development, however Turkey will always fully support the project,” commented Turkey’s Energy Minister Taner Yildiz said in his

He expressed his confidence that the decrease in oil prices that affected gas prices also will not have any impact on TANAP construction and commissioning with the first gas from Shah Deniz 2 will start to pump to Turkey in late 2018.

“Turkey has full confidence over its partners for the project, BP and SOCAR”, Yildiz said.

The long waited BP’s step forward with joining to the partnership was a relief for Azerbaijan as well as for Turkey.

BP signed a framework agreement for joining TANAP in January, 2013. While the company repeatedly was confirming that it is fully committed to TANAP it took more than two years for the company to make next step yet.

Yildiz said that the project will not compete with Russia’s Turkish Stream proposal, which will bring Russian gas via pipeline under the Black Sea.

Socar was planning to sell 12 percent from its TANAP stake to Norway’s Statoil and 5 percent to France’s Total earlier but later the companies decided not to join to the project.  

“Total and Statoil had announced their plans to join TANAP but then changed their minds with selling theirs stakes in Shah Deniz development and withdrawn from it. It raised concerns of whether BP joins or not to the project”, the industry sources in Baku who wished not be named told Natural Gas Europe.  

Considering that TANAP is a crucial chain for the Southern Gas corridor and for delivery natural gas from Caspian to Europe losing the loss of BP as a partner could have meaningfully impacted project financing and delivery.

At the same time BP as an operator and major partner for Shah Deniz needs TANAP for deliver gas produced from $ 28 billion development scheme to the international markets.  

It was also important to confirm BP’s commitment to the project ahead of ground breaking ceremony for TANAP next week.

The ceremony is planning for March 17 in the eastern province of Kars with attendance of the heads of two states – Azerbaijan and Turkey.

Earlier Socar president Rovnaq Abdullayev said that the actual construction of the pipeline will start in April.