EBRD in talks with Azerbaijan, Turkey on funding gas pipeline

TANAP, launched in Turkey in March 2015, aims to carry 16 billion cubic meters (bcm) of gas a year by mid-2018 from Azerbaijan’s Shah Deniz II project in the Caspian Sea, one of the world’s largest gas fields developed by a BP-led consortium.

The 1,850-km (1,150-mile), $10 billion pipeline will stretch from Turkey’s border with Georgia to Greece and is key to Turkey’s ambition to cut its own dependence on Russian gas.

Initially, Turkey will buy the first 6 bcm per year of gas from TANAP. A further 10 bcm will be delivered to Europe once it is connected to the Trans Adriatic Pipeline (TAP) by 2020. By 2023, TANAP’s capacity will rise to 23 bcm per year and then to 31 bcm by 2026, according to project executives.

“We have started talks with the Azeri government on the issue of financing, but it’s too early to talk about figures,” Svitlana Pyrkalo, the EBRD’s principal adviser, told reporters.

She said that issue was a key topic in talks between Azeri officials and EBRD President Suma Chakrabarti in the Azeri capital, Baku.

The EBRD, set up in 1991 to invest in the former Soviet economies of eastern Europe, said earlier this year that it also was considering allocating up to 1.5 billion euros ($1.7 billion) for the TAP project in a record loan.

The bank is considering issuing up to 500 million euros from its own funds and trying to arrange with other banks up to 1 billion euros in a syndicated loan.