The Asian Development Bank (ADB) is considering a $450 million loan to Azerbaijan to help expand its Shah Deniz natural gas project, the bank said on Tuesday.
Azerbaijan’s biggest gas field, Shah Deniz is being developed by BP, Azeri state energy firm SOCAR and others. It holds an estimated 1.2 trillion cubic metres of gas.
Europe is looking to Azerbaijan as it seeks to diversify its gas imports and lessen its reliance on Russian energy. Shah Deniz I has been pumping gas since 2006 and has an annual production capacity of about 10 billion cubic metres (bcm) of natural gas.
Shah Deniz II is expected to produce 16 bcm of gas a year beginning in 2019-2020, with 10 bcm earmarked for Europe and 6 bcm for Turkey.
“The ADB has started a review of the project, but there is no precise schedule for its approval. The ADB is evaluating its possible financing in the amount of $450 million,” the bank said in a statement.
The second stage of the Shah Deniz field development includes 26 subsea wells, two offshore platforms, gas and condensate subsea pipelines and the expansion of the Sangachal terminal near the Azeri capital Baku and the South Caucasus Pipeline. The expansion project is estimated at $28 billion.
Azerbaijan is separately seeking international funding to build the Trans Anatolian Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) which will form the Southern Gas Corridor. It has so far raised $1 billion via a Eurobond issue