Azerbaijan Finances Its Share of $6.6 Bn within Southern Gas Corridor

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To date, Azerbaijan has invested $ 6.6 billion to finance its stake in the Stage-2 project for the development of the Shah Deniz gas condensate field, as well as to the gas export infrastructure. $ 799.3 million has been spent this year.

This was reported to Caspian Barrel in CJSC Southern Gas Corridor.

According to the CJSC, the obligations of the Azerbaijani side in financing these projects are currently estimated at $ 12.4 billion. Thus, already over 53% of the planned costs of the CJSC have already been completed.

We remind you that Southern Gas Corridor CJSC was established by Presidential Decree No. 287 of February 25, 2014 “On several measures related to the second stage of development of the Shah Deniz gas condensate field and other projects to create the Southern Gas Corridor.” 51% of the shares being state property belong to the Ministry of Economy, and 49% – to SOCAR.

In the Southern Gas Corridor CJSC it was said that as of May 1, the development project of Shah Deniz-2 (upstream) was fulfilled in general by 92%. As for the infrastructure projects, the extension of the South Caucasus gas pipeline (from the Caspian coast to the Georgian-Turkish border) was completed by 83.8%, the project for the implementation of the Trans-Anatolian gas pipeline (TANAP) – by 69% (its first part – from the Georgian-Turkish border to the city of Eskishehir – the reception of Azerbaijani gas for the needs of Turkey is ready by 80%), and the TAP project is completed by 40.3%.

It should be noted that the international rating agency Fitch Ratings in its March report referring to the forecasts of the management of the CJSC reported that for the operations and capital expenditures the structure will need about $ 5.4 billion in 2017 – 2019, taking into account the proceeds from operations under the Shah Deniz-1 project and the South Caucasus Corridor.

“The financing of the Southern Gas Corridor is carried out at the expense of borrowed funds and the capital of the CJSC formed by the government: by means of bonds for 2.5 billion dollars with interest rates below the market rate [LIBOR + 1 percent] and regular capital injections, which by the end of February 2017 reached $ 2.4 billion. In addition, the CJSC has placed two issues of Eurobonds, one billion dollars each in 2016 and 2017,” the agency said.

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