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Azeri-Turkish TANAP gas pipeline finished and ready to export

London — The Trans Anatolian Natural Gas Pipeline, the main segment of the EU's long-planned 'Southern Gas corridor', has been completed and was ready to export from the second phase of development of Azerbaijan's Shah Deniz gas field to Europe, TANAP said Monday.

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The 1,850 km pipeline -- which runs from Ardahan in northeast Turkey to Ipsala on the border with Greece -- was ready to transit gas under existing contracts to supply up to 10 Bcm/year of Shah Deniz gas to customers in Europe, the company said.

Initially projected to cost around $11.7 billion, the final cost of TANAP has been revised down to less than $7 billion, the company said, citing "timely purchase decisions" and the "maximizing of management efficiency".

TANAP has been developed by a consortium of Southern Gas Corridor CJSC (58%) -- itself a joint venture of SOCAR (49%) and Azerbaijan's ministry of economy (51%) -- and also Botas, Turkey's state gas importer (30%), and BP (12%).

The first phase of construction was designed to give an operating capacity of 16 Bcm/yr. Of that, 6 Bcm/yr will be used to supply Azeri gas to Turkey at the Turkish offtake point at Eskisehir and was completed last year.

Supply began last June, and will ramp up from 2 Bcm in its first year of operation, to 4 Bcm in its second year and the contracted 6 Bcm/yr in its third year. Azerbaijan's Trend news agency reported at the end of May that date 1.9 Bcm had been supplied to Turkey through TANAP.

The remaining 10 Bcm/yr capacity will allow Azeri gas to be transited in the export section of the line running from Eskisehir across the sea of Marmara to Turkey's European province of Thrace and to the border with Greece.

A second offtake point is planned to be constructed in Thrace at Gallipoli, allowing the transfer of gas into Botas's grid from where it could be used to supply Turkey's main demand area around Istanbul.

TANAP officials suggested last year that the second offtake point would be operational at the same time as the export section of the line.

However, an official told S&P Global Platts Monday that it will not now be built until the capacity of TANAP is expanded to the full planned 31 Bcm/yr from the current 16 Bcm/yr.

No firm plans have been announced for sources of gas to supply the expansion of TANAP to its full 31 Bcm/yr though Azeri officials have repeatedly said they wanted to use the capacity to carry gas from as yet undeveloped Azeri gas fields.

Work on developing the second phase of Azerbaijan's Shah Deniz gas field which will supply TANAP with the 16 Bcm/yr it will deliver to Turkey and to Europe via TANAP and the Trans Adriatic Pipeline is close to complete.

In a written response to Platts, BP said "production, processing and exporting capacity of the Shah Deniz 2 system" was "almost at plateau" in preparation for the start of the ramping-up of production for the beginning of exports to Europe next year.

BP said current production from the second phase of Shah Deniz was around 20 million cu m/d in addition to production from the first phase of about 31.7 million cu m/d.

In its statement, TANAP noted that the 10 Bcm/yr TAP, which is being constructed to carry the gas from Turkey-Greece border across Greece and Albania and across the Adriatic to Italy, was not yet complete.

According to statements by the TAP development company, a joint venture of BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enag?s (16%) and Axpo (5%), the line is 88.2% complete and is expected to deliver its first gas to Europe some time next year.

-- David O'Byrne, newsdesk@spglobal.com

-- Edited by Dan Lalor, daniel.lalor@spglobal.com