The Asian Development Bank (ADB) and the European Bank for Reconstruction and Development (EBRD), with the participation of the Black Sea Trade and Development Bank (BSTDB), are arranging a financing package of US$1 billion for a landmark offshore natural gas field project in Azerbaijan, Shah Deniz stage II, that is crucial for energy security and a common gas market in Europe.
The development of the gas field will bring gas to south-eastern Europe, a region substantially dependent on coal and on gas from a single source of supply. The gas will be transported through a chain of pipelines – including the existing South Caucasus Pipeline which will be extended under the project – as well as through the planned Trans-Anatolian and Trans-Adriatic pipelines. This network of pipelines will transport the gas from Azerbaijan via Georgia and Turkey to Greece and Bulgaria, and on to Italy, from where it can reach wider Europe.
“This will be the largest gas field development project undertaken in Azerbaijan, generating more economic opportunities and helping to boost closer regional ties with Georgia and Europe,” said Michael Barrow, Deputy Director General of ADB’s Private Sector Operations Department. “ADB’s involvement has helped catalyse long-term bank financing support from commercial banks.”
“This project is one of the EU’s highest priorities for the energy sector. It is key for energy security because it diversifies routes and sources of gas supply,” said Riccardo Puliti, EBRD Managing Director for Energy and Natural Resources. “It helps cut carbon emissions by providing a bridge fuel for renewables and replacing coal. The project will also be a very big step towards the market-based hub pricing for gas which will bring Europe closer to a common gas market.”
“Supporting regional cooperation and energy efficiency in the Black Sea region are strategic priorities for BSTDB. We are happy to contribute to this project demonstrating strengthened synergies among development partners to foster sustainable growth in our member countries,” said Igor Leshukov, BSTDB Vice President, Banking.
The financing will be extended to Lukoil Overseas Shah Deniz Ltd, a subsidiary of Lukoil, which has a 10 per cent interest in the Shah Deniz II gas field.
The EBRD and ADB will each lend US$250 million to the project on their own accounts (A-loans) and BSTDB will provide a US$60 million parallel A-loan alongside the EBRD and ADB. The remainder of the financing will be provided by a group of commercial lenders – Bank of China, London branch; ING Bank N.V; Société Générale; and Unicredit Bank Austria AG, under the EBRD/ADB B-loan umbrella. One more commercial bank will join the syndicate at a later stage to complete the financing.
The total cost of the Shah Deniz II development by the operating consortium of companies (BP, TPAO, Petronas, SOCAR, Lukoil, NICO and SGC) is expected to top US$47 billion.
BP will build and operate the project facilities. Production from the project is expected to begin in 2018 and will help provide jobs for over 16,000 people through to 2022.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Sign me up for the newsletter!
Notify me of follow-up comments by email.
Notify me of new posts by email.
Philips India launches CSR campaign ‘HarSaansMeinZindagi’ to promote awareness on Childhood Pneumonia in India
BACKSTREET BOYS PERFORM AT THE VENETIAN MACAO AS PART OF THEIR BIGGEST ARENA TOUR IN 18 YEARS
Huawei Ships 200 Million Smartphone Units For 2019 In Record Time
Titan Eyeplus forays into Smart eyewear with Skyfly Mutrics Smart Eyewear
The Do’s and Don’ts of Social Automation as a Mode of Getting Real Instagram Followers
2014 The Global Indian New Network (TGINN)