1. The Southern Gas Corridor
Dr. Vitaliy Baylarbayov, SOCAR Deputy Vice-President

2. SOCAR and the Mediterranean Region
Activities in the Mediterranean region
SOCAR sells most of its oil exports to countries in the Mediterranean
A SOCAR subsidiary is drilling offshore Israel
SOCAR Trading is one of major investors in the Malta LNG-to-Power Project
Gas producers in the East-Med region may use the Southern Gas Corridor infrastructure to deliver additional gas exports to Europe

3. SOCAR and the Europe Exporting gas to Europe
Instead of selling to local markets, SOCAR decided to embark on a “mega project” to export gas to the Europe
A project that transits 7 countries
Deals with six regulatory systems
Involves 12 investing companies
Includes 12 gas buyers
Costs 45 billion dollars

4. Equity Ownership across the Southern Gas Corridor
IJV: Incorporated Joint Venture
UJV: Unincorporated Joint Venture

5. Sangachal Terminal expansion
SD2 and the Southern Gas Corridor Multiple mega-projects – $45 billion scope
Sangachal Terminal expansion
$2bn
Offshore facilities
$15bn
26 wells
$6bn
SCP Expansion
$5bn
TANAP
$11-12bn
TAP
$5bn
Southern Corridor scope

6. The Southern Gas Corridor
 New gas supply for Europe
A superhighway that can facilitate the transport of gas from different sources, not only Azerbaijan but also Central Asia, Iraq, and East-Med
Can reach additional markets in Europe, such as the Balkans
Built with double the capacity and can be scaled up to 60 BCM (2.2 tcf)
The first project in decades to introduce new gas supplies into Europe rather than simply re-routing existing supplies, thus diversifying sources

7. Gas Export Potential
Billion cubic meters per annum (bcm/a)

8. Gas sales volumes (bcma)
Gas Sales Agreements
Gas sales to EU buyers signed in 2013:
Axpo, GDF Suez, Gas Natural, E.ON, Shell
Hera, ENEL, Bulgargaz, DEPA
Gas to Europe to start ~1 yr later than 1st gas
Total value ca. $100 bn
Gas sales to BOTAS
Stage 2 sales signed in 2011 (First Gas in 2018)
Complementing current Stage 1 sales
Gas sales volumes (bcma)
Shah Deniz Field
South Caucasus Pipeline Expansion (SCPX)
Trans Anatolian Pipeline (TANAP)
Trans Adriatic Pipeline (TAP)
ACQ: Annual Contract Quantity

9. TAP’s Key Features Aligned with the EU’s energy policy objectives:
Designed to expand from 10 to 20 bcm (plus) per year
Built-in physical reverse flow
Connecting directly with various existing and proposed pipelines, provides energy security in South-Eastern Europe
Can provide Bulgaria with a new source of gas through IGB or Kula-Sidirokastro Interconnector
This project will also bring significant commercial investment to southern Europe and is estimated to create over 30,000 jobs in the construction phase

10. Interconnectors
The Southern Gas Corridor will be a strong catalyst for interconnectors across Southern Europe
The TAP section can connect Caspian gas to multiple European markets
TAP will connect to the Italian natural gas grid to provide firm capacity at the Italian virtual trading point (PSV), from which all Italian gas exit points can be reached
TAP can reach Austria via TAG pipeline to have similar transportation capacity as other planned pipelines
6 bcm/a reverse technical capacity
25 bcm/a average swap potential (2011)
TAP can reach Germany and France via Transitgas pipeline through Switzerland
Virtual backhaul of approx. 10 bcm/a
Planned physical backhaul of 15 bcm/a

11. Potential Interconnectors - IAP
In addition, there are signs of strong commercial interests in adding a component of the project into the Balkans
The Ionian-Adriatic Pipeline to Croatia (IAP) would potentially bring further SOCAR activity in the Mediterranean region

12. European Energy Security
Europe needs reliable suppliers
Supply from SOCAR and Azerbaijan is viewed as part of Europe’s broader strategic goals
The challenges to security of supply could be political, technical or even due to extreme weather and demand
SOCAR met its supply demands during the harsh winter of 2012 due to its storage facilities and strong commitment to meet its contractual obligations
Recently, SOCAR has engaged in expansion of its storage facilities in order to continue to successfully be a reliable supplier

13. Shah Deniz and the EU
As part of the FID decision, Azerbaijan extended the PSAs on the Shah Deniz field to 2048
This lengthens the presence and involvement of major European companies in Azerbaijan
We are glad to play a role in European energy security
The FID on the Southern Gas Corridor took place in December 2013
This is only one of many important milestones
We hope for continued attention by the EU to see this project to its successful completion.

14. SOCAR and the EU
SOCAR views its focus on the Mediterranean region as part of its vision of evolving from a national oil company to an International Oil Company
SOCAR hopes to be certified by the EU soon to acquire 66% in Greece’s DESFA and thus to play a role in gas transmission in the region
 The SCG appears prominently in the European Commission's latest “Energy Security Strategy” report
SOCAR and Azerbaijan see this role in Europe as part of its own national strategy, and is very proud to do so