Ahead of schedule TANAP see project cost fall by $2B
by Anadolu Agency
ANKARADec 12, 2016 - 12:00 am GMT+3
by Anadolu Agency
Dec 12, 2016 12:00 am
Saltuk Düzyol, the general manager at the Trans-Anatolian Natural Gas Pipeline (TANAP) project has said 55 percent work of the project was completed at the end of this November, way ahead of its scheduled dateline of January 2017.
"I hope Turkey will begin receiving two billion cubic meters of gas during the first phase of the project which will ultimately bring six billion cubic meters of gas to the country by the end of June 2018. Given the speedy construction, TANAP's initial investment cost of $11.7 billion has come down to $8.5 billion at the moment."
According to Düzyol, the track on the 1,570-kilometer section of the 1,850-kilometer pipeline has been opened and welding operations on a 1,200 kilometer section have been completed. TANAP construction is divided into four different stages and on a sea crossing. Three lots extending from the Georgian border to Eskişehir will include some 56 inches of pipes being used in Eskişehir, where Turkey will receive the gas through the longest and largest pipeline in Europe.
TANAP is the middle part of a 3,500-kilometer-long pipeline. In addition, wellhead investments continue in the Azerbaijani oilfield called Shah Deniz 2. All this, amounts to a value chain worth $45 billion, $28 billion of which consists of wellhead investments, while the rest are the South Caucasus Pipeline expansion project, TANAP and around the 700-kilometer Trans Adriatic Pipeline (TAP).
Six billion cubic meters of
gas to flow eventually
Düzyol also noted the use of Azeri gas in Turkey would increase with TANAP, adding when the project is completed at the end of June 2018 the first phase of six billion cubic meters of gas will start flowing into Turkey.
This amount will reach four million cubic meters in 2019 and six million cubic meters in 2020 in accordance with Turkey's needs. Currently under construction, the pipeline will be operated within the framework of a 15-year gas transportation agreement. The initial investment, which was made for a capacity of 16 billion cubic meters of gas, will rise to 24 billion cubic meters and then 31 billion cubic meters in the following years.
Currently, Turkey consumes 40-45 billion cubic meters of gas per year. With six billion cubic meters of gas to be received through TANAP, Turkey's total contract portfolio will reach 58 billion cubic meters. In addition, the country will have a chance to import another 15 billion cubic meters of gas in the long run.
Düzyol also talked about the gas transfer to Europe, saying 10 billion cubic meters of it will be delivered to nine large buyers in the European market via the Turkish-Greek border as of June 2019.
Project management and
oil prices reduced costs
A total of 58 percent of TANAP'S shares belong to the State Oil Company of Azerbaijan Republic (SOCAR), 30 percent to the Petroleum Pipeline Corporation (BOTAŞ), and 12 percent to British Petroleum (BP).
Referring to the reason of decline in the investment cost, Düzyol said, "We have reduced the initial investment cost of TANAP to $8.5 billion, which was initially determined to be $11.7 billion. Depending on both the project management system we have applied, as well as the fall in global commodity and oil prices, the investment cost has fallen to this level. With the completion of such pipeline projects, Turkey will be able to access cheaper gas."
Stressing that the project would make a major contribution to the economy by creating direct and indirect employment opportunities during construction and operation period, Düzyol said it is offering nearly 10,00 jobs in 20 the provinces it passes.
The first lot of the project is being constructed by the Fernas İnşaat construction company, while second and third lots are being built by a consortium of Sicim-Yüksek-Akkord and Tekfen construction companies.
A total of 80 percent of TANAP's pipes is produced in Turkey, while the remaining 20 percent is being imported from China. International environmental standards as well as worker health and work safety requirements are also observed on the highest level during the construction.
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