The Asian Development Bank (ADB) will provide $1 billion in private and public sector assistance to expand Azerbaijan’s Shah Deniz II, one of the world’s largest gas fields, said the message of the bank posted on its website Dec. 7.
The assistance comprises a $500 million private sector loan to the Southern Gas Corridor closed joint stock company (SGC) and a $500 million sovereign-counterguaranteed partial credit guarantee, according to the message.
The guarantee will back $526 million in commercial loans made by a consortium of international banks to SGC, which is 51 percent owned by the Azerbaijani government and 49 percent by the country’s state oil company SOCAR, the message said.
The message further said that the ADB assistance will provide additional revenues that the government can direct to social spending and to continued efforts to diversify the economy.
“ADB, through its private sector window, has already demonstrated strong support to the Shah Deniz gas field expansion through its direct assistance to this project in 2015,” said Michael Barrow, Director General of ADB’s Private Sector Operations Department.
“The expansion of the Shah Deniz gas field is key for Azerbaijan’s economy, providing the country a long-term revenue stream and diversifying its gas exports to Europe,” said Sean O’Sullivan, ADB Director General for Central and West Asia Department. “ADB’s support will help generate economic opportunities for the private sector, create thousands of jobs, and help boost Azerbaijan’s ties with neighboring countries and Europe.”
Shah Deniz II project envisages drilling 26 subsea wells, construction of two platforms, underwater pipelines for gas and condensate, expansion of the oil and gas terminal in Sangachal township, construction of two gas compressor stations and connection of this infrastructure to the South Caucasus gas pipeline.
As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline and Trans-Adriatic Pipeline.
ADB, based in Manila, was established in 1966 and is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.