Oil Fund: Southern Gas Corridor to demand from Azerbaijan $2.5 bn of annual investment until 2019

Baku, Fineko/ The State Oil Fund of Azerbaijan (SOFAZ) begins forming the capital of the state company on the management of the Southern Gas Corridor project.

SOFAZ executive director Shahmar Movsumov says that now the Fund’s Supervisory Board is considering a change in the SOFAZ budget for 2014 for payment of the capital of this company.

"$51 million to be financed for the gas project management company will be directed for the formation of its capital. These finances have not been envisaged in the Oil Fund’s budget, and will be directed as long-term investments," Movsumov said.

He added that the financing of the Southern Gas Corridor projects will begin in 2014.

"The Southern Gas Corridor requires an annual investment of $2-2.5 bn in the period of until 2018-19. We hope for the project recoupment since 2023-24," Movsumov said.

This February Azerbaijani President Ilham Aliyev ordered on some measures concerning Shah Deniz 2 and other projects on creation of the Southern Gas Corridor.

Under the Order, the State Oil Company of Azerbaijan (SOCAR) is to ensure effective management of these projects through the establishment of a special closed joint stock company with registered capital of $100 million, 51% of which is state-owned and 49% belongs to SOCAR.

The State Oil Fund of Azerbaijan (SOFAZ) will provide payment for the state-owned shares of the CJSC and long-term investment in the Company on a condition to return the funds required for financing the stakes in projects transferred to this CJSC.

The Company is established on the basis of recommendations of the State Commission, formed by Decree #15 from 29 October 2013, on the financing SOCAR equity stake at the expense of the government in projects of Shah Deniz 2, expansion of the South Caucasus Pipeline (SCPX), the construction of the Trans-Anatolian pipeline (TANAP) and the Trans Adriatic Pipeline (TAP). The CJSC receives SOCAR stakes in these projects. The aforementioned State Commission will be represented in the Supervisory Board of CJSC through its designated representatives.

Ownership and management of state shares in the CJSC will be carried out by the Ministry of Economy & Industry, and dividends on shares will be transferred to the SOFAZ. CJSC all income will be transferred to it as well until full return of investment.


12.03.2014 12:11


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