Presentation on energy policy of Azerbaijan in Indianapolis University

In the framework of annual meetings with the students of the Indianapolis University (Athens Campus) Ambassador of the Republic of Azerbaijan to the Hellenic Republic Mr. Rahman Mustafayev made on the 27th  of  March presentation on energy policy of Azerbaijan.  Ambassador  informed  audience about the main direction and priorities of the Azerbaijani policy and diplomacy in the energy field, its economic, political and security dimensions and the current state of Azerbaijan-Hellenic relations in this particular area. He also briefed the students and professors of the University on the recent decisions taken by Shah Deniz Consortium (SDC)  in respect of its evaluation of potential gas export routes to Europe.

Ambassador mentioned that the SDC had made significant progress in its evaluation of potential gas pipelines to Europe. Three 3rd Part pipeline projects have been considered: IGI Poseidon and TAP to Italy, and Nabucco towards Central Europe. A fourth project towards Central Europe, SEEP, which was proposed by members of the SDC, is also being considered.

Ambassador noted, that as part of the evaluation process the SDC received tariff proposals from each of the 3rdParty pipeline projects and gas purchase offers from potential buyers on 1 October 2011, had considered these proposals carefully and held multiple clarification meetings with each project. The SDC made decision to select a single pipeline to Italy and a single pipeline towards Central Europe for further consideration. It will work with the owners of these two selected pipeline projects in order to develop their proposals further over the next year. In this context Ambassador R. Mustafayev mentioned that the SD Export Negotiations Team (consisting of BP, Statoil, Total and SOCAR) had decided to select the TAP pipeline for a period of exclusive negotiations on transport of gas to Greece and Italy. Negotiations with  IGI Poseidon have been ceased. This decision was made on the basis of the selection criteria previously communicated.

Responding to the question of selection criteria he underlined, that the following selection criteria had been used during the process for selection of an export route: commerciality; project deliverability; financial deliverability; engineering design; alignment and transparency; operability; scalability; public policy considerations.

The SDC now looks forward to cooperation and negotiations with the TAP project, with the aim of reaching agreement on mutually beneficial terms and plans, noted Ambassador Mustafayev. He further added, that no decision had yet been made on the selection of a single pipeline towards Central Europe. The Shah Deniz Export Negotiations Team has received a new offer from Nabucco for a “Nabucco West” pipeline running from the Turkish-Bulgarian border to Baumgarten. Further time is required to carefully consider this offer. The SDC is also considering the SEEP project.

In conclusion to his presentation Ambassador emphasized, that selection of a single pipeline towards Central Europe will be made no later than June 2012. Following this decision the final route selection will be made no later than planned final investment decision for Shah Deniz gas field in mid 2013.

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