First Gas Deliveries to Turkey Launched Via TANAP Pipeline - SPUTNIK NEWS

30.JUNE.2018, 14:24 

MOSCOW (Sputnik) - Azerbaijan has started first gas deliveries to Turkey via the Trans-Anatolian Pipeline (TANAP), Southern Gas Corridor CJSC General Director Afgan Isayev said in a statement.

"The SGC project has been financially supported by the leading international financial institutions, and Phase-0 under TANAP project, which relates to the works required for the first commercial gas deliveries to Turkey, has already been completed. First commercial gas deliveries to Turkey has commenced today, on 30 June 2018. The works planned for the delivery of natural gas to Europe through Turkey in the near future are being carried out according to the schedule," Isayev was quoted as saying in the statement.

According to the statement, the Multilateral Investment Guarantee Agency (MIGA, part of World Bank group) has approved the loan for the Azerbaijan Republic totaling $750 million to finance the TANAP project.

It will transport gas from the Azerbaijani Shah Deniz Stage 2 gas field to Turkey and Europe.

The target capacity of the TANAP pipeline is 31 billion cubic meters of gas per year. The pipeline is 1,150 miles long.

MIGA guarantee for TANAP to help draw in commercial banks - TREND NEWS AGENCY

30 December 2016 10:45 (UTC+04:00)
Baku, Leman Zeynalova

The board of the Multilateral Investment Guarantee Agency (MIGA) (World Bank Group) has approved a guarantee for up to $1.2 billion for the Trans-Anatolian Natural Gas Pipeline (TANAP) project, a source in MIGA told Trend Dec.30.

“The guarantee is expected to help draw in commercial banks that will contribute to long-term financing needs of the project,” said the source. “Reinsurance capacity is also expected to be mobilized.”

TANAP project envisages transportation of gas from Azerbaijan’s Shah Deniz field to the western borders of Turkey. The length of TANAP is 1,800 kilometers with the initial capacity of 16 billion cubic meters.

Southern Gas Corridor already raised over 50% of money needed until 2020 - ABC.AZ

23.12.2016 16:40
Baku, Fineko/abc.az.

CJSC Southern Gas Corridor (CQD/SGC) has already raised more than 50% of financing required until 2020.

SGC general director Afghan Isayev has stated that out of $11.9 bn on which the Southern Gas Corridor should be financed in 2014-19, it has been already raised $6 bn, including $2 bn in 2016.

He pointed out that the Asian Development Bank has given a loan for 15-year period under governmental guarantee for $500 million and $526 million under 15-year guarantee on syndicated lending. The International Bank for Reconstruction & Development (IBRD), part of the World Bank Group gave $400 million for 30-year term and the Multilateral Investment Guarantee Agency (MIGA), another member of the Group, provided $750 million of guarantees for syndicated lending for 15-year period. In turn, the Asian Infrastructure Investment Bank (AIIB) gave a loan in the amount of $600 million for 30 years.

Expert: Israel Might be Required to Provide Guarantees for Political Risks Insurance for Gas Projects | Natural Gas Europe

Boaz Schwartz, Chairman of the Association of Foreign Banks in Israel

January 06th, 2016

Israel’s gas projects may need political risk insurance policies to secure financing for their development when the buyers are in neighbouring states, according to a senior Israeli banker.

Boaz Schwartz, the Chairman of the Association of Foreign Banks in Israel, says banks and lenders to the projects would demand such insurance policies. "It would be right to consider political risk insurance particularly with neighbouring countries and when contracts have also political significance. The insurance will be part of the requirements for the project financing," Schwartz said last year when he testified in front of the Kandel Committee, the body that set the natural gas regulatory framework.

He said: "It is important to note that Egypt and Jordan are sub-investment grade countries and Turkey is borderline investment grade. It is therefore very important to back export contracts with strong political insurance and/or the support of one or more international export credit agencies like US EXIM or global agencies like MIGA or IFC. The government should, in our opinion, take an active role in lobbying for such support and potentially even underwrite some of the political risk on its own."

The low investment grade rating of Egypt and Jordan is due not only to weak economies but also because their regimes are unstable.

He estimated that developing the country’s gas assets could cost between $8 billion and $10 billion, with more than 70% of that coming from debt.

In its calculations the A.F.B.I. found that if gas from Leviathan were sold at $5.45/million British thermal units to Israeli, Jordanian and Egyptian customers the investors' share of the cash flow would be 40%, their share of the NPV would be 35% and the return on investment would be 15%. He said that would be less than the industry norm.

But if those insurers were unable to issue political risk policies it might be that "the government [of Israel] would consider providing guarantees. The state shouldn’t take business risks. However, it should take [the risk] in case there is a change of regime in Egypt or Jordan and the gas contract is cancelled."

He mentioned the US government as a potential interested party in the project's implementation. The U.S mediated between Israel and Jordan during the gas talks and even encouraged the creation of an American intermediary to take title to the gas in order to reduce the friction between the Jordanian administration and its population.

Ya'acov Zalel

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