South Caucasus Gas Pipeline Capacity May Be Increased -Azeri Minister

The annual capacity of the South Caucasus natural gas pipeline, also known as Baku-Tbilisi-Erzurum Pipeline, may be increased to between 30 billion cubic meters and 35 bcm from the current 16 bcm and eventually even tripled, Azerbaijan's energy minister Natig Aliyev said Tuesday.

He said the initial capacity increase is needed to meet additional production of 16 bcm a year from the Stage 2 of Shah Deniz field development.

Oil major BP PLC (BP) said April 17 the Shah Deniz consortium, in which the company has a pivotal role, has approved the decision to start front end engineering and design, or FEED, on the estimated $25 billion Shah Deniz Stage 2 project.

The other Shah Deniz partners include Norway's Statoil ASA (STO) and Azerbaijani state energy company SOCAR, as well as France's Total SA (TOT), Russia's Lukoil Holdings (LKOH.RS) and Iranian national oil company Naftiran Intertrade Co.

The minister also said that the pipeline's capacity may be increased to 55 bcm a year, if Azerbaijan agrees with Turkmenistan to pump natural gas from the latter via this pipeline. However, he noted, that despite his government's political will to move ahead with this project, Turkmenistan has yet to decide on it.

-By Alexander Kolyandr and Aida Sultanova, Dow Jones Newswires; [phone] [e-mail]