Azerbaijan and Georgia agree on transit tariffs for Shah-Deniz pipeline

Jul 24, 2001 02:00 AM

Giorgi Chanturia, president of the Georgian International Oil Corporation (GIOC), said that the governments of Azerbaijan and Georgia had reached an agreement on transit fees for shipments of gas from the Shah-Deniz offshore field. Previously, the two sides had been unable to strike a deal on the division of transit tariffs for the gas that will flow through a planned pipeline from Baku to Erzurum. Chanturia said, however, that the issue had been resolved when Azerbaijan agreed to forego its share of transit fees.
Baku will allow Tbilisi to collect its portion of the tariff, he said, noting that similar arrangements had been made for the planned Baku-Ceyhan oil pipeline. Chanturia went on to say that the agreement on transit tariffs had removed the last obstacles to construction of the gas pipeline. As such, he said, work on the Baku-Erzurum conduit may begin before the end of this year.

The costs of construction are expected to amount to about $ 1 bn. The gas pipeline will follow a 1,000 kmroute from Baku to Erzurum, following the path of the Baku-Ceyhan oil pipeline; BP and Statoil, the operators of the Shah-Deniz field, have already begun working with Azerbaijan's national gas monopoly Azerigaz to conduct an engineering study for the project. When finished, the pipe will be able to carry an initial 2 bn cmpy of gas, with throughput eventually rising to 16 bn cmpy.

Source: NewsBase
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