The BP-operated Shah Deniz II consortium has reached a Final Investment Decision on the development of the Shah Deniz 2 gas field in Azerbaijan. The Shah Deniz II project aims at producing 16 bcm/year of gas, of which 10 bcm/year would be exported to Europe and 6 bcm/year to Turkey. This decision triggers plans to expand the South Caucasus Pipeline (SCPX) through Azerbaijan and Georgia, to construct the Trans Anatolian Gas Pipeline (TANAP) across Turkey and to construct the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy. Together these projects will create a new Southern Gas Corridor to Europe. The total cost of the Shah Deniz stage 2 and SCP Expansion projects will be around US$28bn.
Meanwhile, Statoil has sold a 10% share of its 25.5% holdings in the Shah Deniz and the South Caucasus Pipeline. The buyers are SOCAR (6.7%) and BP (3.3%). Statoil will as part of this transaction receive a total cash consideration of US$1.45bn. The effective date of the transaction is 1 January 2014. Statoil will not participate as an investor in TANAP.