Azerbaijan reduces funding of TANAP project because of disagreements with Turkey?
The president of Azerbaijan Ilham Aliyev on April 10 signed a decree to amend the budget of State Oil Fund of the Republic of Azerbaijan (SOFAZ) for 2014. As a result the funding of the project TANAP was cut by billion dollars, the Azerbaijani news agency Turan reports.
As it is stated in the article, the fund expenses are reduced from $14.47 billion to $13.5 billion; that is after the amendments the expenses of SOFAZ have been reduced by $970 million.
In SOFAZ’s 2014 budget second largest item of expenditure after the transfers to state budget of Azerbaijan was “the funding of the state share of Azerbaijan in TANAP-$1,020 billion”. The President of Azerbaijan amended this particular item of expenditure reducing the funding of TANAP for 2014 almost 20 times to 51 million.
The Azerbaijani news portal Haqqin.az reports that the construction of TANAP pipeline, which should deliver Azerbaijani gas to Europe, is postponed because of existing disagreements between Azerbaijan and Turkey. As it is reported by the Turkish media executive director of Turkish company Doğal Gaz İletim A.Ş, Saltuk Düzgöl told about this during the energy conference held in Ankara.
According to him, the construction of the gas pipeline which should deliver Azerbaijani gas from the field of Shah Deniz to Europe was planned for this year. “However, the construction of the gas pipeline is postponed due to the problems in the distribution of shares in the project and issues with the purchase of the land, where the pipeline would be laid, from the population,” Düzgöl said noting that the construction of the pipeline is scheduled to start in 2015.
Haqqin.az notes that the parties have repeatedly stated that the construction would be launched this year. It was as well stated by PM of Turkey Recep Tayyip Erdoğan during his visit to Baku. Whereas now Turkey states that the construction of the pipeline is postponed by whole year and explains the delay by the disagreements in regard to the allocation of shares and the problems of land purchase from the population. All these developments take place at the time of acute geopolitical crisis, when Europe longs for Caspian gas.
Note that on April 8 2013 in the meeting between the President of the State Oil Company of Azerbaijan (SOCAR) Rovnag Abdullayev and Energy Minister of Turkey Taner Yildiz the new cost of the project TANAP was promulgated-$10-12 billion. Earlier SOCAR leadership stated that the construction of TANAP would cost -$ 7-8 billion. TAP and TANAP pipelines are designed to deliver Shah Deniz gas from Azerbaijan to Europe.