The Greek Government’s role has been pivotal in closing the agreement
DEPA signed a gas sales agreement with the Azeri gas company SOCAR and the Shah Deniz Consortium for the delivery of natural gas to be produced from the Shah Deniz 2 reserve. The agreement was signed in Baku, the capital of Azerbaijan.
The Greek Government’s intensive efforts, as well as the pivotal role Greece has played in the promotion – and eventually the qualification – of the TAP pipeline system led to today’s important sales agreement for the supply of natural gas from Shah Deniz, utilizing the TAP pipeline system.
The contribution of the Ministry of Environment, Energy & Climate Change, and in particular of the Deputy Minister, Makis Papageorgiou, substantially contributed to DEPA’s efforts in achieving competitive pricing on gas supply. Minister Giannis Maniatis, has also expressed his content for the agreement, as stated by Harry Sachinis, Chairman and CEO of DEPA, at his recent speech in Baku.
The agreement will have a duration of 25 years and the first gas volumes are expected to be delivered in 2019. The first out of a series of important benefits qualifying the TAP pipeline system is starting to become apparent. The Shah Deniz Stage 2 project is set to bring natural gas directly from Azerbaijan to Europe for the first time, opening up the Southern Gas Corridor. Greece plays a pivotal role in this development by being a country through which the gas will flow to the market, leveraging pipeline systems crossing Greece including IGB, the interconnector between Greece and Bulgaria, a project co-sponsored by DEPA.
“We are very pleased that gas from the Shah Deniz Stage 2 project will be transferred directly to Greece and on to neighboring markets. This agreement furthers DEPA’s efforts to ensure supply diversification, competitive pricing and energy security for the Greek as well as the Southeastern European market into which DEPA plans to expand. This development will bring significant benefits to consumers in Greece and across our region”, stated Harry Sachinis, Chairman and CEO of DEPA.
Established in 1988, DEPA, Greece’s Public Gas Corporation, is the largest player in the Greek gas market. Besides focusing on serving large customers, its subsidiaries include three distribution companies in some of the largest cities in Greece. DEPA also participates in pipeline projects designed to enhance market liquidity in its region. Finally, DEPA owns transmission subsidiary DESFA, whose sale to SOCAR is awaiting regulatory approvals.
(Please find hereunder Shah Deniz Consortium Press Release)
Shah Deniz major sales agreements with European gas purchasers concluded
The Shah Deniz consortium announced today that 25-year sales agreements have been concluded for just over 10 billion cubic metres a year (BCMA) of gas to be produced from the Shah Deniz field in Azerbaijan as a result of the development of Stage 2 of the Shah Deniz project. Nine companies will purchase this gas in Italy, Greece and Bulgaria.
The Shah Deniz Stage 2 project is set to bring gas directly from Azerbaijan to Europe for the first time, opening up the Southern Gas Corridor.
In total, 16 BCMA of Shah Deniz Stage 2 gas will be delivered through more than 3500kilometres of pipelines through Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and under the Adriatic Sea to Italy.
Today’s agreements for European gas sales follow the signing of agreements with BOTAS in 2011 to sell 6 BCMA of gas in Turkey.
“We are delighted that the years of negotiations led by SOCAR with multiple European companies have come to a successful conclusion. These agreements mark the biggest gas sales in the history of Azerbaijan. They also mark the beginning of direct links between Azerbaijan’s huge gas resources and the European markets. Azerbaijan is committed to long-term cooperation with the Shah Deniz gas purchasers. I am sure that this cooperation will bring benefits to consumers across Europe and will play an important role in strengthening European energy security,” said Rovnag Abdullayev, President of SOCAR.
Commenting on the agreements, Gordon Birrell, Regional President for BP in Azerbaijan, Georgia and Turkey, said: “The Shah Deniz consortium is proud to be involved in theconclusion of one of the biggest gas deals in the history of the oil and gas industry. On behalf of the Shah Deniz consortium, I would like to thank all the companies involved in these negotiations. The deep cooperation that has led to the signing of these gas sales agreements sets the foundation for many years of partnership. The strong demand for Shah Deniz gas gives us confidence in the long-term development of Azerbaijan’s gas resources. Today’s signings represent another important milestone bringing us closer to a final investment decision on the Shah Deniz 2 project”.