Socar Seeks Shah Deniz 2 Loan
Azerbaijan state-run energy company Socar has applied for a $450mn loan from the Asian Development Bank to expand its flagship Shah Deniz project.
According to ADB, Socar and Lazard Europe, which is Azerbaijan`s financial adviser on the southern gas corridor that will bring Azeri gas to Europe, have been negotiating terms for a loan since last autumn.
“It is in the processing stage. Once approved, the loan will be provided under the state guarantees,” ADB sources told NGE, declining to give details or the schedule for approval.
The project is aligned with the ADB draft Azerbaijan country partnership strategy for 2014-2018 and will help convince the international finance community of the bankability of large-scale finance in Azerbaijan, the bank said.
Azerbaijan is separately seeking for international funding to build the Trans Anatolian Pipeline (Tanap) and Trans Adriatic Pipeline (TAP) that will form the southern gas corridor (SGC). It has so far raised $1bn in eurobonds.
Energy minister Natik Aliev said recently that talks to finance TAP would be finalized by May.
The second stage of the field development includes 26 subsea wells, two offshore platforms, gas and condensate subsea pipelines and the expansion of the Sangachal terminal near Baku and the South Caucasus Pipeline.
Led by BP, an international consortium will expand output from Shah Deniz 2 by 16bn m³/yr, 10bn m³/yr of which will be pumped to Europe by the chain of export pipelines known collectively as the southern gas corridor and the rest going to Turkey.
Socar is a partner for the 870-km TAP project along with BP, Snam, Fluxys, Enagas and Axpo, which acquired the founding company of TAP, Swiss utilty EGL.
TAP will link up with the 1,850 km long Tanap under construction in Turkey. Socar leads the $10bn project, with other partners including BP and Turkey’s state pipeline company Botas. The cost of the project, from the wells to the landfall of TAP in southern Italy, is put at $45bn.