Importance of Trans Anatolian Natural Gas Pipeline Project

for Executing Southern Gas Corridor

2012 Frankfurt Gas ForumGermany

28 November 2012

Stand Points of the Project

• In December 2011, Turkey and

Azerbaijan have signed an agreement

for a new gas pipeline project that will

connect Turkey's east and west,

carrying Azerbaijani gas to Europe.

• The new pipeline, named the Trans-

Anatolian Natural Gas Pipeline, is

being designed by the Azerbaijani

state-owned oil company SOCAR

• The inter-governmental agreement between

the Government of the Republic of Turkey and

the Government of the Republic of Azerbaijan,

has been signed on Tuesday, June 26th 2012 in

Istanbul with broad participation.

Strategic Alliance Between Azerbaijan and Turkey

• Security Supply of Europe:

• Source, route and volume.

• Shahdeniz sources of Azerbaijan

• Shahdeniz 2, Upsheron, Ümid and Babek field

• Security Supply of Turkey:

• Source, volume and national network.

Stand Points of the Project

The Southern Gas Corridor

• Southern Gas Corridor is needed for

the independence of European

Union Energy Security.

• Decreased gas production and

increased demand pushes Europe to

pay more importance to develop

Southern Gas Corridor.

• For this reason, Trans Anatolian

Natural Gas Pipeline Project (TANAP)

is playing crucial role on the

European Energy Security.

• Diversification of energy supply

routes and provision of energy

security in the region and beyond are

closely interrelated, it is important to

move forward and achieve new

results in the implementation of plans

and projects that are drew up in the

last few years.

Natural Gas Supply-Demand Projections of Europe

Most possible scenario- Blue one- …

Jeroen de Joode, www.ecn.nl European gas market developments in different energy transition scenarios

Natural Gas Resources of Azerbaijan

• Reserves of Absheron, Umid, Babek, and

Nakhchivan: 1.25 tcm of gas and more

than 200 mln. tons of condensate*

• Shah-deniz Reserves: 1.2 tcm gas, 240

mln. Tons condensate

• Shah Deniz-1; Plateu production 9 bcma

• Shah Deniz-2; Plateu production 16 bcma

*Ilham Nasirov, Deputy General Manager Investment Division, SOCAR

Natural Gas Supply-Demand Projection of Turkey

High grow rates, no new contracts case.

Short Intro / Highlights of the Project

• Objective: Transport of Azeri and Regional Gas

Supplies to Turkey and to Europe

• Capacity: 16-31 BCM

• Shareholding: SOCAR-BOTAŞ-TPAO

(BP-Statoil-Total)

• Target Operation: 2018

• Target Markets: Turkey and Europe (TAP/NIC)

Initially Planned Corridor

Critical Milestones

• IGA 1- 25 Oct. 2011

• Gas SPA - 25 Oct. 2011

• MoU 26 Dec. 2011 (ratified)

• Project Company (TANAP Bv.) – June 2012

• IGA-HGA 26 June 2012 (pending ratification)

Current Activities/Status

• Preliminary/Conceptual Studies for:

• Routing and Route Verification

• ESIA / EIA

• Permitting

• Mapping

• Technical Feasibility ongoing (sensitivity analysis)

• Policy and Strategy setting ongoing

• Organizational Set-up ongoing

Way forward :Critical Milestones – Development Plan

• Technical Studies

• PMOE assigned

• Engineering Contractor

assigned

• ESIA/EIA

• Engineering

• Permitting

• Procurement of LLI

and EPC

• Land Acquisition and

Construction

• Commercial Framework:

• Project Entity set-up including

Shareholders Agreement

• Transportation Agreements

• Financing Arrangements

• Operation Agreements

Objective is to ensure commercial operation by 2018

THANK YOU