Oil Fund to buy bills of debt of Southern Gas Corridor for over $900 million

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Azerbaijan State Securities Committee has registered the issue of unsecured and nominal bonds of Southern Gas Corridor to the amount of $917,320,800, reported the Baku Stock Exchange (BICEX).

9,173,208 bonds with the face value of $100 each have been issued. Underwriter of placement of shares is PSG-Broker. The term of bonds circulation is 10 years with the profitability of six-month Libor+1%.  The interests will be paid every six months.

In February 2014 Azerbaijani President Ilham Aliyev signed a decree to create a closed-type joint stock company for efficient management of the Shah-Deniz Phase 2, expansion of the Southern Caucasian gas pipeline, trans-Anadolu (TANAP) and trans-Adriatic (TAP) gas pipelines. 51% shares in JSC will be owned by the government and 49% by State Oil Company of Azerbaijan (SOCAR).

The State Oil Fund of Azerbaijan (SOFAZ) has been instructed to fund share of the JSC owned by the government. The funding will be provided in form of long-term investments on condition of repayment.

Southern Gas Corridor will allow Europe diversifying its sources of hydrocarbon deliveries and raising energy safety, while Azerbaijan will get a new market in face of Europe.

The final investment decision on the Shah-Deniz Phase 2 was made on December 17, 2013. 10 billion cub.m. of gas from the Shah-Deniz field will be transported to the European market.

The contract to develop Shah Deniz offshore field with the proved resources of 1.2 trillion cub.m. of gas was signed on June 4, 1996.

The partners for development of Shah-Deniz field are SOCAR with 16.7%, BP (28.8%), Norwegian Statoil (15.5%), Iranian NICO (10%), French Total (10%), Russian LUKoil (10%) and Turkish (9%).

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