The U.S. oil rig count…
As the demand for low-carbon…
Turkey’s Trans-Anatolian Pipeline (TANAP), conceived to deliver gas from Azerbaijan to Europe, has become so popular recently that Turkmenistan also wants to use it, and now even Iran is interested in investing in the project.
“We’re looking into the possibility of buying equity in TANAP,” Mohsen Pakayin, Iran’s ambassador to Azerbaijan, said May 6. “We may buy equity in the pipeline if we reach our production targets by 2018.”
TANAP, whose preliminary cost has been estimated at up to $11 billion, would carry as much as 16 billion cubic meters of gas each year from Azerbaijan’s offshore Shah Deniz II field that is being prepared for use by a consortium led by the British energy giant BP.
Related: Oil Price Recovery May Be Too Much Too Soon
The pipeline will run about 1,150 miles from Turkey’s border with Georgia to Greece, then to Bulgaria. Then it would connect with the Trans-Adriatic Pipeline (TAP) that would bring the fuel through Albania and finally beneath the Adriatic Sea to Italy. The entire project, which began in March, is expected to be finished by late 2018, and gas flows to Europe would start in 2019 or 2020.
The EU now relies on Russia for about 30 percent of its gas, and half of that flows through Ukraine. Political and pricing disputes, however, recently have made that source unreliable, and Europe appears to have found an alternative in TANAP.
In a step that may ensure a steady and generous supply of gas to the West, Turkmenistan has expressed interest in shipping some of its gas through TANAP to Europe, EU Energy Commissioner Maros Sefcovic said May 1 in the Turkmen capital of Ashgabat. That former Soviet republic in Central Asia is just across the Caspian from Azerbaijan and has the world’s fourth-largest proven reserves of gas.
Related: Oil Sector May Not Cause Financial Apocalypse After All
And then there’s Iran, with the world’s second-largest proven reserves of gas. As a result, it, too, is interested in taking part in large energy projects in the region, Pakayin said in an interview with the Azerbaijan Press Agency (APA) published May 5.
Pakayin said Iran has four years to study the TANAP project before it begins shipping gas to Europe, which is plenty of time to become familiar with its operations. “Currently, our experts on oil and gas are conducting researches,” he said. “We’ll declare our decision when we achieve a result.”
The Iranian envoy also said Tehran is considering whether it can afford to invest in the pipeline project. “We have to increase gas production to participate in the regional energy projects. If our products reach the planned level by 2018, we can take part in the regional projects. It’s difficult to say exactly now.”
Related: Is This The Top For Oil Prices For Now?
What makes the decision even more difficult is the current uncertainty over whether it will be free of Western sanctions that were imposed on Iran because of its nuclear program.
Pakayin is not on record commenting on whether Iran also may be interested in shipping its own gas to Europe via TANAP, but APA said Azeri officials haven’t ruled out that possibility.
Although TANAP will travel mostly through Turkey, the State Oil Company of the Azerbaijan Republic (SOCAR) owns 58 percent of the project, while Turkey’s stake, controlled by the pipeline company Botas, will be 30 percent, up from 20 percent last year. BP, meanwhile, is working to establish a 12 percent stake in the pipeline.
By Andy Tully of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com