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09.10.2015 13:25

Azerbaijan could supply blue fuel to India, Pakistan

Azerbaijan's state energy giant SOCAR, which is keen on expanding operations in the retail sale of its oil products abroad, has not excluded the possibility of supplying Azerbaijani gas to India and Pakistan in the future.

In an interview with Italian media, SOCAR Head Rovnag Abdullayev said on October 7 that currently, SOCAR has no plans to enter Asian markets.

"However, I do not exclude that in the future we could export gas to such promising markets as India and Pakistan," he noted.

SOCAR hasn't reduced investment in large projects

Abdullayev also added that despite the drop in oil prices in world markets, SOCAR has not reduced investments in its existing large projects.

"SOCARs revenues will be cut in half in 2015 due to the oil price fall, but we still have good supply, he noted. The cost price of oil production in Azerbaijan is low. This gives us some advantages. The Southern Gas Corridor project, envisaging the transportation of Azerbaijani gas to Europe, is competitive. The contracts on its sale for 30 years have been already concluded."

Abdullayev also said that the oil crisis has not affected SOCARs future investment plans.

"We will continue investing in large projects, he said. In the future, we do not expect any problems with liquidity. The Central Bank of Azerbaijan has opened a credit line for us in the amount of about 2 billion manats."

The Southern Gas Corridor is arguably the global oil and gas industrys most significant and ambitious undertaking yet. The corridor is a complex challenge involving many stakeholders, including seven governments and 11 companies.

The project oversees the transportation of the gas extracted at the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea. Shah Deniz Stage 2 gas will make a 3,500 kilometer journey from the Caspian Sea into Europe. This requires upgrading the existing infrastructure and the development of a chain of new pipelines.

The existing South Caucasus Pipeline will be expanded to include a new parallel pipeline across Azerbaijan and Georgia, while the Trans-Anatolian pipeline will transport Shah Deniz gas across Turkey to meet the Trans-Adriatic Pipeline, which will take gas through Greece and Albania into Italy.

The Southern Gas Corridor is set to change the energy map of the entire region, connecting gas supplies from the Caspian to markets in Europe for the very first time.

The first gas supplies through the corridor to Georgia and Turkey have been given a target date of late 2018. Gas deliveries to Europe are expected just over a year after the first gas is produced offshore in Azerbaijan.

The Southern Gas Corridor pipeline system has been designed to be scalable to twice its initial capacity to accommodate additional gas supplies in the future.

SOCAR keen on turning Azerbaijan into strategic location in natural gas market

Touching upon SOCARs agreement with Russian Gazprom, through which gas will be supplied to Azerbaijan under a swap regime and then transported to the southern regions of Russia, Abdullayev said that SOCAR's goal is to turn Azerbaijan into a strategic location in the natural gas market.

"We are expanding the capacity of our gas storage facilities. This must help increase the number of contracts in this sector," he noted.

Russian Gazprom Company started to supply gas to Azerbaijan on September 29 in accordance with a 5-year purchase-sale contract concluded in September 2015, which is capable of being extended.

The average daily volume of supplies is currently about 6 million cubic meters.

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