Sue Saarnio Attends the 4th Ministerial Meeting of the Southern Gas Corridor Advisory Council
On February 15, the 4th Ministerial Meeting of the Southern Gas Corridor Advisory Council was convened in Baku, Azerbaijan to discuss the ongoing Southern Gas Corridor (SGC) project. Principal participants included President of Azerbaijan Ilham Aliyev, European Commission Vice President for Energy Union Maros Sefcovic, First Deputy Prime Minister of Georgia Dmitry Kumsishvili, Turkey’s Minister of Energy and Natural Resources Berat Albayrak, and Acting Special Envoy and Coordinator for International Energy Affairs for the US Department of State’s Bureau of Energy Resources Sue Saarnio. Representatives from relevant European countries, energy companies, and financing institutions also attended.
The SGC aims to deliver gas from Azerbaijan’s Shah Deniz field through Turkey via the South Caucasus Pipeline (SCP) and Trans-Anatolian Pipeline (TANAP) and onto southeastern and southern Europe via the Trans-Adriatic Pipeline (TAP). Europe is interested in this project as it will diversify its supply of gas, thus improving its energy security. Sue Saarnio also advocated the US’s support for European energy security. This meeting was broken into four plenary sessions.
The first involved hearing updated reports about the construction of all parts of the SGC. Here, President Aliyev highlighted the statuses of completion of various parts of the project: the Shah Deniz 2 field at 99%, SCP at 95%, TANAP at 95%, and TAP at 66%. Turkish Energy Minister Albayrak further stated that TANAP would be operational before this July since tests already started last month. During the second session, the ministers of countries heavily involved in the project held speeches. Financing the SGC, particularly in an age of changing trends in the global energy market, was the main discussion topic of the third session. Representatives from the European Union highlighted the European Bank for Reconstruction and Development’s $500 million loan for TANAP and the European Investment Bank’s $1.85 billion loan for TAP. The Asian Development Bank, Asian Infrastructure Investment Bank, and World Bank have also provided loans worth hundreds of millions of dollars. The total estimated cost for the entire Southern Gas Corridor project is around $40 billion. Finally, SGC expansion (possibilities include incorporating Iran, Turkmenistan, and the rest of Europe) was considered.
At the conclusion of the meeting, agreements were signed between SOCAR (Azerbaijan’s state oil company that is a minor shareholder in the Shah Deniz field and the SCP and a major stakeholder in TANAP) and various energy companies from southeastern Europe such as Albgaz, Plinacro, BH Gas, and Montenegro Bonus.