Turkey, Socar sign Tanap pipeline deals: Update

Adds information on expected start date of Tanap line in paragraphs 5 and 6

Turkey and Azerbaijan's state-owned Socar have signed agreements for 1,800km of steel pipeline for the Turkish section of the Trans-Anatolia Pipeline (Tanap) project, which will carry Shakh Deniz natural gas from Azerbaijan to Europe.

China's Baosteel will provide 20pc of the contract, with the remaining sections provided by three Turkish consortiums, Turkish officials said today.

The signing marks a major step forward in a project that promises to be "part of the solution to Europe's gas supply problems", Turkish energy minister Taner Yildiz said. Turkey has increased its exposure to the project in the past year, taking larger stakes in the Shakh Deniz fields and in the Tanap project itself.

The Turkish stretch will be the longest of the $45bn Tanap project, comprising 1,350km of 56-inch pipe running from the Georgian border to the local take-off point at the city of Eskisehir in the west of the country, and 450km of 48-inch pipe to the Greek border. Turkey is to take 6bn m³/yr of the line's initial capacity of 16bn m³/yr.

Officially, first gas is scheduled to flow to Turkey in the second half of 2018, with deliveries to Europe through the Tap pipeline from Greece to Italy in 2019. But Azeri energy minister Natiq Aliyev told Argus in September that the date for first gas to Turkey had slipped to 2019, and for the first deliveries to Europe to 2020.

And there are plans to expand the capacity of the line as new production comes on line in the Caspian region, potentially reaching 31bn m³/yr by 2026.

Turkey's state-run oil and gas company TPAO holds 19pc in the Shakh Deniz project, making it the second-largest stakeholder after project operator BP. Turkey's state-run pipeline company Botas has a 30pc share in Tanap, the largest after Socar.

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