SOCAR keen on realizing its long-term energy plans

/By AzerNews/

By Gulgiz Dadashova

Azerbaijan’s energy giant SOCAR is still interested in purchasing a 66-percent share in Greek DESFA gas transportation system operator.

SOCAR President Rovnag Abdullayev made the remark while talking to reporters on September 14, adding that currently, the Azerbaijani side is waiting for the early parliamentary elections in Greece.

The Greek natural gas transmission manager, DESFA, plays a crucial role in the realization of major pipeline projects including the Trans-Adriatic pipeline, Greece-Bulgaria Interconnector, and the newly proposed Turkish Stream.

“After this election, we will discuss this issue [purchasing a share in DESFA] with the country’s new authorities,” he said, noting that the talks have been temporarily frozen till the clarification of the issue related to the new government in Greece.

SOCAR agreed to pay 400 million euros to buy a 66 percent stake in DESFA in the summer of 2013. The agreement in 2013 to sell a majority stake in DESFA to the Azerbaijani company was stalled by a European Commission investigation in late 2014 over EU competition and energy security concerns.

Later in early 2015, the new Greek government announced that it would sell only 49 percent to SOCAR, however, the Azerbaijani side countered that it sought to fulfill its original 66 percent stake.

TANAP pipeline realization

Speaking about the sale of shares in the Trans-Anatolian Natural Gas Pipeline, Rovnag Abdullayev said the purchase of TANAP stakes by SOCAR Turkey Enerji is a systemic solution to issues related to the project financing.

He said this process is a kind of transfer of assets within SOCAR, which will make it possible to solve the problems with the project financing.

“Out of our 58 percent stake in TANAP, we will transfer 7 percent to SOCAR Turkey Enerji, which will also participate in the financing of the project,” Abdullayev said. “This is a specific transfer of assets. Also, this will increase the assets of SOCAR Turkey Enerji in Turkey.”

He went on to add that the main part of the funds received by SOCAR from the sale of 13 percent share of SOCAR Turkey Enerji to the US bank Goldman Sachs for $1.3 billion, will be directed to repay the loans taken from banks and financing new projects.

TANAP project envisages transportation of gas of Azerbaijan’s Shah Deniz field from the Georgian-Turkish border to the western borders of Turkey.

TANAP’s initial capacity is expected to reach 16 billion cubic meters of gas per year. Around six billion cubic meters of this gas will be delivered to Turkey and the rest of the volume to Europe. Turkey will obtain gas in 2018, while Europe will get it in early 2020 after the Trans Adriatic Pipeline (TAP) is constructed.

BP and the TANAP consortium signed a shareholder agreement March 13, according to which BP will become one of the shareholders of TANAP. The agreement is one of the main documents for BP’s ownership of a stake in the TANAP project.

Following the completion of a legal implementation procedure, TANAP’s shareholders list will be as follows: SOCAR – 58 percent, Botas – 30 percent and BP – 12 percent.