Within the framework of the Southern Corridor Project, negotiations for the creation of new gas transportation routes were held in 2009-2010. As a result, an agreement was reached on the implementation of the Azerbaijan-Georgia-Romania Interconnector project (AGRI), envisaging liquefied natural gas transportation to Romania and the European market via the territory of Georgia and the Black Sea.
On September 14, 2011, the Presidents of Georgia, Azerbaijan, Romania and the Prime Minister of Hungary signed a project support declaration in Baku. On the same occasion the respective companies of all three countries – SOCAR (Azerbaijan), GOGC (Georgia) and Romgaz (Romania) signed a Memorandum of Understanding and the Incorporation Act (SC AGRI LNG Project Company SRL) to implement the Azerbaijan-Georgia-Romania Interconnector project. At a later stage, a Hungarian company MVM joined SC AGRI LNG Project Company SRL.
For the purpose of preparation of the Feasibility Study for the AGRI Project, SC AGRI LNG Project Company SRL hired the UK-based consulting company "Penspen" Ltd. In January 2015, the Board of Directors of AGRI LNG Project Company SRL approved the Feasibility Study prepared by "Penspen" Ltd.
АGRI (Azerbaijan-Georgia-Romania Interconnector) meets EU energy diversification and alternative supply route policy. The project is a part of the South Corridor project and enjoys wide international support.
The idea of transportation of the Caspian oil to Europe arose in Ukraine in the early 1990s. For this purpose, the presidents of participant countries of the Euro-Asian Oil Transportation Corridor Project (EAOTC) – Azerbaijan, Georgia, Lithuania, Poland and Ukraine - signed the document in Krakow on May 11, 2007 and the ministers signed it in Gdansk on June 5, 2007 supporting the idea of building the corridor for Caspian oil transportation to European and World markets.
The initial aim of the project was transportation of Caspian oil to Central and Northern Europe. "Odessa-Brody" Pipeline was officially launched in August 2001. In May, 2003 Ukraine, Poland and EU signed the declaration on supporting the Caspian oil transit through "Odessa-Brody" pipeline and also its extension up to Plock and further to Gdansk via existing pipeline.
Based on the decisions made by the heads of governments of Poland, Lithuania, Ukraine, Georgia and Azerbaijan at the Energy Summit held in Vilnius in October 2007, the International Pipeline Company "SARMATIA" Sp. z o.o was founded. Currently, the registered capital of "SARMATIA" Sp. z o.o equals to 20,06 million PLN. The shareholders of the Company are: SOCAR (Azerbaijan), AB “Klaipedos Nafta” (Lithuania), PERN “Przyjaźń” S.A. (Poland), "Ukrtransnafta" (Ukraine) and Georgian Oil and Gas Corporation (Georgia). Currently, GOGC share in "SARMATIA" Sp. z o.o equals to 16,9%.
The primary objective of "SARMATIA" Sp. z o.o is implementation of the Euro-Asian Oil Transportation Corridor Project.
Western Route Export Pipeline
The Western Route Export Pipeline (WREP) also known as the Baku-Supsa Pipeline is the first investment of International Oil Consortium in Georgia. The pipeline transports crude oil from offshore Chiragi oil field in the Caspian Sea to the Supsa terminal through Sangachal on the Georgian Black Sea coast.
The length of this pipeline is 833km. The Georgian section of the pipeline is 375 km and it is the same route as Soviet-era Samgori-Batumi oil pipeline. Azerbaijan International Oil Consortium financed full rehabilitation works of the pipeline as well as the construction of new buildings. The Supsa terminal with the capacity of one million barrels was also constructed within the framework of the pipeline construction.
BP, the largest shareholder of the consortium, operates the Georgian section of WREP.
Project partners: BP – 34,1%, Chevron – 10,3%, SOCAR – 10%, INPEX – 10%, Statoil – 8,6%, ExxonMobil – 8%, TPAO – 6,8%, Itochu – 3,9%, Amerada Hess – 2,7%.
The BTC oil pipeline is the shortest route to transport oil from the Caspian Sea to the Mediterranean.
The total length of one of the longest pipelines in the world is 1768 km; 443 km in Azerbaijan, 249 km in Georgia, and 1,076 km in Turkey.
The diameter of the pipeline ranges from 42 to 46 inches. The pipeline has eight pumping stations (two in Azerbaijan, two in Georgia and four in Turkey).
The pipeline construction costs totaled to about $4 bl.
The BTC pipeline exports oil extracted from the Azeri-Chirag-Gunshli field to Ceyhan.
The owner of the project is International Consortium BTC Co with eleven participating partners. The pipeline is operated by BP and the project was financed by International Financial Corporation and EBRD.
After putting the pipeline into operation, the Georgian state budget received $50 ml as a direct transit fee.
Consortium partners are: BP – 30,1%, AzBTC – 25%, Chevron-8,90%, Statoil – 8,71%, TPAO – 6,53%, Eni – 5%, Total – 5%, Itochu – 3,4%, INPEX – 2,5%, ConocoPhillips – 2,5%, Amerada Hess – 2,36%.
South Caucasus Pipeline
The South Caucasus Pipeline (SCP) has been designed to transport natural gas from the Shah Deniz field as well as other fields of the Caspian basin to Turkey and then from Turkey to the European market.
The length of the pipeline is 691km, with 249km in Georgia. On the border the pipeline is tied to the branch line built by the Turkish side, which connects the SCP to the local gas supply system of Erzrum.
Construction of the SCP was completed in 2006. First deliveries of natural to Georgia gas through the SCP commenced in early 2007. In Georgia the SCP follows the route of the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline on the territory of Georgia.
The total cost of the project totaled to $1bl. The pipeline belongs to the consortium where BP, Statoil, SOCAR, LukOil, NICO, TOTAL and TPAO are partners in the project development. BP is the technical operator of the pipeline while Statoil is the commercial operator.
After completing additional stages of the pipeline development and working at full capacity, the pipeline will transport up to 21 – 24 bcm of natural gas.
According to the project agreement, Georgia is not only a transit country but also a natural gas consumer country.
Georgia has an option to purchase 5% of gas transported from Azerbaijan to Turkey for a favorable price. In addition, for 20 years starting from the project functioning date, Georgia will purchase additional volume of gas about half a million cubic meters, from project investors at a special price.
Project partners: BP, SOCAR, Statoil, LukOil, NIC, Total, TPAO.