Bank of China contributes $500 million to $1.3 billion syndicated loan for Trans-Anatolian Natural Gas Pipeline Project

In 2016, a syndicate of banks (led by Bank of China) issued a $1.3 billion loan to SOCAR Turkey Enerji A.S. (STEAS) — a Turkish subsidiary of the State Oil Company of the Azerbaijan Republic (SOCAR) — for the Trans-Anatolian Natural Gas Pipeline (TANAP) Project. The Luxembourg branch of the Bank of China contributed $500 million to the syndicated loan. The proceeds of the loan were used by STEAS to purchase an ownership stake in the Trans-Anatolian Gas Pipeline Project (TANAP). Prior to this acquisition, Southern Gas Corridor Closed Joint Stock Company (SGC CJSC) held a 58 percent ownership stake in the TANAP Project. SGC CJSC is a joint investment vehicle that the Government of Azerbaijan and the State Oil Company of the Azerbaijan Republic (SOCAR) established for the Southern Gas Corridor. The purpose of the TANAP project is to transport natural gas produced from the Shah Deniz-2 field — located in the Caspian Sea in Azerbaijan — to Turkey and then onwards to Europe. It is the most important link in the Southern Gas Corridor, which also includes the Shah Deniz Stage 2 gas development project, the South Caucasus Pipeline, and the Trans Adriatic pipeline projects. With 1.2 trillion cubic meters in natural gas reserves, Shah Deniz 2 is the largest gas development project in Azerbaijan and forms the production stage of the Southern Gas Corridor. The total length of the South Caucasus Pipeline spanning Azerbaijan (443 km) and Georgia (248 km) is 691 km. The pipeline connects to TANAP in the village of Türkgözü at the Georgia-Turkey border. With additional investments, the annual capacity of the South Caucasus Pipeline was increased from 7 cubic meters of gas (bcma) to 23 bcma. TANAP is the longest and largest diameter natural gas pipeline in Turkey, the Middle East, and Europe, stretching 1,850 kilometers with 56-inch pipes in diameter, and includes a 17.6-km long sea crossing with twin pipelines. The entire system and the pipelines — except for the temporary facilities used during construction and above ground facilities — were designed and built for burial in soil. The pipeline runs from the Turkish border with Georgia, beginning in the Turkish village of Türkgözü in the Posof district of Ardahan, will run through 20 provinces including Kars, Erzurum, Erzincan, Bayburt, Gümüşhane, Giresun, Sivas, Yozgat, Kırşehir, Kırıkkale, Ankara, Eskişehir, Bilecik, Kütahya, Bursa, Balıkesir, Çanakkale, Tekirdağ and Edirne until it ends at the Greek border in the İpsala district of Edirne. The high-strength pipes and hot bends used in the project were produced specifically for TANAP and 80 percent of the mainline pipes were manufactured in Turkey. The project includes 4 metering stations, 2 compressor stations, 11 pig stations, 49 block valve stations, and 2 gas outlets. TANAP Natural Gas Transmission Company (Tanap Doğalgaz İletim A.Ş) was the contractor responsible for implementation. A groundbreaking ceremony took place on March 17, 2015. The section of pipeline from the Turkish border with Georgia until Eskişehir of Turkey was launched in an international opening ceremony on June 12, 2018, with the flow of commercial gas to Turkey from June 30, 2018. The final mechanical work in the pipeline between Eskişehir and the Turkish-Greek border was completed at the end of 2018 with the first test pumping held in April 2019. A project completion ceremony took place on November 30, 2019. The TANAP Project is part of a larger Southern Gas Corridor Project. The other components of the Southern Gas Corridor Project are the South Caucasus Pipeline Project, the Shah Deniz Natural Gas Field Project (see Project ID#66946), and the Trans-Adriatic Pipeline (see Project ID#65855).

Additional details

1. The Chinese project title is 贯通安纳托利亚天然气管道项目 or 阿塞拜疆国家石油公司土耳其油气 13 亿美元银团贷款项目 or 阿塞拜疆国家石油公司银团贷款项目. The Turkish project title is Trans-Anadolu Doğalgaz Boru Hattı.

Number of official sources

13

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19