Azerbaijan's gas reserves boosted by Total find

The French oil and gas major Total has discovered a major gas field off the coast of Azerbaijan, the company announced on 9th September. The field is believed to be one of the country's largest, providing a major boost to Azerbaijan's reserves.

The new field lies within the Ashberon block, which Total has been operating through a subsidiary since it made an agreement with Azerbaijan's state energy firm SOCAR in 2009. Total holds 40 per cent, as does SOCAR, while GDF Suez holds the remaining 20 per cent. The block is located around 100km east of the capital Baku, and around 25km north of the enormous Shah Deniz gas field.

The exact size of the discovery remains open to speculation at present. Total announced that the field as a whole had potential for “several trillion cubic feet of gas and associated condensates”, but on 12th September, SOCAR claimed that the discovery holds around 350 billion cubic metres of gas and 45 million tons of gas condensate.

Whatever the exact size of the field, it provides a major fillip to Azerbaijan's energy reserves, perhaps bringing them to 2.55 trillion cubic metres. Contrary to the hopes expressed by some analysts and officials, however, the new discovery is not necessarily a saving grace for the EU's Nabucco project to bring Caspian gas to Europe. Azerbaijan already possesses sufficient gas for Nabucco to get underway, mainly in the second phase of the Shah Deniz field and recent discoveries in the Umid field.

The problems with developing Nabucco have not therefore been about gas reserves – they have been about building pipelines to export the gas, as well as the technical work to actually extract the gas. This is particularly true in the deep and challenging waters of the Caspian Sea. First Vice-President of SOCAR Khoshbakht Yusifzadeh acknowledged this, saying that extraction from the new field was unlikely to begin before 2021 or 2022. Meanwhile negotiations over the pipeline project which will bring gas to Europe continue.

Azerbaijani officials are nonetheless exuberant over the find, with President Ilham Aliyev calling it a “truly remarkable event” and stating that it shows “that our country possesses great opportunities, great potential and bright future.”

Sources: News.az, Wall Street Journal, Financial Times

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Iran-Azerbaijan sign transport and energy co-operation agreement

The Iranian president, Mahmoud Ahmadinejad, has said that Iran will increase co-operation with Azerbaijan, especially in the transport and energy sectors. He added that an agreement was reached after in-depth talks with Azerbaijani president Ilham Aliyev.

"Iran-Azerbaijan relations are more than relations between two neighbouring, friendly countries. They are relations between two fraternal nations. No one can interrupt our relations," said Ahmadinejad.

According to official statistics, compiled by the Azerbaijani State Statistics Committee, trade turnover with Iran totalled $167.26 million in January-September; $76.87 million accounted for imports from Iran and $90.39 million for exports to the country.

The two countries are connected via the, 1,474.5km long, Gazi-Magomed-Astara-Bind-Biand gas pipeline. The route is a branch of the Gazakh-Astara-Iran gas pipeline, which was commissioned in 1971. The State Oil Company of the Azerbaijan Republic (SOCAR) is in the process of constructing a new compressor station in the Astara region, which will increase gas transportation to Iran by late 2010.

The gas supplied to Iran is used to deliver fuel to the Nakhchivan Autonomous Republic .Once the expansion of the gas compressor station in Astara is complete it will fully provide gas to Nakhchivan Autonomous Republic.

Source: Trends News Agency

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Eni in talks with President Aliyev about CNG project

Eni's CEO, Paolo Scaroni, has met with Azerbaijan's President Ilham Aliyev, and several other government officials, to discuss Eni's come back to Azerbaijan's upstream sector, and the compressed natural gas (CNG) project. Eni plans to appeal for a permit that would enable the company to transport several billion cubic meters of Turkmen gas across the Caspian Sea to the coast of Azerbaijan, from where it would then be transported through an overland pipeline to other destination ports.

Scaroni has recently met with Russian, US and EU government officials to deliberate the financial and commercial aspects of the project which is the first of its kind to be studied in the Caspian region, and would permit a substantial reduction of gas flaring in Turkmenistan.

The technology involved allows transportation of high pressure gas (not liquefied) by specialist containment systems within the vessels, and allows feasibility of projects otherwise not achievable with traditional technologies such as transport by pipeline or liquefied natural gas (LNG).

To find out more about Eni please visit Eni's web site, which you can find here.

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