World Economy

Turks to Supply 1.2m Tons of Steel Pipes to Azerbaijan

Turks to Supply 1.2m Tons of Steel Pipes to AzerbaijanTurks to Supply 1.2m Tons of Steel Pipes to Azerbaijan

Turkish and Azerbaijani companies and government officials inked a contract to supply the steel pipe for a planned major natural gas pipeline project between the two countries.

Turkish steel pipe producers Toscelik, Borusan Mannesmann, Erciyas Boru, Emek, Umran and Noksel had previously won the tender to supply steel pipes for the planned Trans-Anatolian gas pipeline system (TANAP). The project aims to carry the rich gas resources of Azerbaijan to energy-hungry European countries, TodayZaman reported.

Representatives from the supplier companies met senior Turkish government officials, including Prime Minister Ahmet Davutoglu and Energy Minister Taner Yildiz, along with State Oil Company of Azerbaijan Republic (SOCAR) President Rovnag Abdullayev on Tuesday in Ankara.

The contract covers the supply of 1,800-kilometer steel pipes for the construction of the TANAP project over a four-year period. The Turkish companies will supply approximately 1.2 million tons of steel pipes for TANAP -- 80 percent of the total -- and earn an estimated $3 billion. China’s Baosteel will provide the remainder of the pipes. The initial capacity of the pipeline is expected to reach 16 billion cubic meters (bcm) per year.

Approximately 6 billion cubic meters of the volume will be allocated to Turkey, while the rest will be transported to Europe. The first flow of gas to Turkey is scheduled for the second half of 2018, and Ankara plans to start pumping the Azeri gas to Europe in 2019.

A year after a decision to establish a consortium to build a gas pipeline to supply gas from the Shah Deniz field to Europe through Turkish territory, Azerbaijan and Turkey signed an intergovernmental agreement on TANAP in June 2012. Turkey’s Yildiz said on Tuesday in Ankara that the estimated cost of TANAP is $45 billion and that Turkey will employ more than 5,000 people in 21 separate provinces on the pipeline route. Davutoglu also said Ankara and Baku planned to increase TANAP’s capacity to 31 bcm per year by 2026. In June this year, the state-owned Turkish Pipeline Corporation (BOTAS) and SOCAR agreed to increase the Turkish share of TANAP from 20 to 30 percent.

Turkey has been building further connections with natural gas-producing countries to diversify its energy resources in attempts to lessen its over-reliance on certain producers, particularly Russia, the major provider for Turkey’s soaring demand for natural gas. It aims to purchase new gas fields or expand its share in existing ones.