The Southern Gas Corridor has received a waiver from U.S. sanctions against Iran's energy customers, an expected win for the project, designed to transport 16 Bcm/year of Caspian natural gas to Turkey and southern Europe, according to S&P Global.
The language appeared in an executive order that President Donald Trump signed Monday. BP had been seeking a sanctions waiver for its development of Azerbaijan's offshore Shah Deniz fields, the source of the Southern Gas Corridor's natural gas. According to economist Vugar Bayramov, the sanctions will not have a negative impact on the activities of the consortium because it does not apply to the Southern Gas Corridor.
“Iran's NICO holds a 10% share in the second phase of Shah Deniz, potentially triggering US sanctions against Iran petroleum sector investment. However, sanctions will not affect the Southern Gas Corridor, because it allows the export of Azerbaijani gas to Turkey and the European market. Although Iran is represented in this consortium, the sanctions will not have a negative impact on the activities of the consortium. Azerbaijan will be able to export its natural gas to the Turkish and Iranian markets,” Vugar Bayramov, Azerbaijani economist said.
The Southern Gas Corridor, one of the priority energy projects for the European Union (EU), consists of the Shah Deniz-2, South Caucasus Pipeline Expansion, Trans-Anatolian gas pipeline (TANAP) and Trans Adriatic Pipeline (TAP) projects. This pipeline chain will transport natural gas Azerbaijan's “Shah Deniz-2” field to Europe through Turkey. 3,500-kilometer-long Southern Gas Corridor, will deliver 6 billion cubic meters of Azeri gas to Turkey and 10 billion to Europe per year.
“In general, the Southern Gas Corridor will transport about 31 billion cubic meters of gas to the European market as well as the Turkish market at the second stage, which, of course, indicates the importance of the project. The project’s exclusion from anti-Iran sanctions demonstrates the fact that the Southern Gas Corridor is of great significance not only for Azerbaijan and the region, but also for the whole world. Indeed, on the one hand, it is the indicator of the attitude of the White House to the regional and mega-projects implemented by Azerbaijan. The White House does not create any problems in the implementation of this project, which was initiated by Azerbaijan. At the same time, this is one of the key factors of the importance of the Southern Gas Corridor,” economist added.
The official opening ceremony of the Southern Gas Corridor was held in Sangachal terminal on May 29, 2018 and started pumping gas into the Southern Gas Corridor pipeline. The TANAP gas pipeline was inaugurated in the city of Eskisehir, Turkey, on June 12, 2018. The Trans Adriatic Pipeline (TAP) will be put into operation in 2020. Currently, overall construction works on TANAP are 94.8 per cent and on TAP 74.6 per cent completed.