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BALKANS AS ONE OF PRIORITY DESTINATIONS IN
SOCAR
BALKANS AS ONE OF PRIORITY DESTINATIONS IN EUROPE
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SOCAR Balkans is active in exploring potential avenues of business opportunities and partnership in the field of energy in the region, including Croatia. We continue our engagement with the regional energy companies in terms of gasification and further development of the Ionian Adriatic Pipeline project
SOCAR is the leading national energy company in Azerbaijan which maintains the key posi tions in upstream developments, petrochemical and oil and gas processing, international marketing and trading oper ations, as well as retail services. SOCAR has transformed over the last ten years into a significant stakeholder in the European energy sector with substantial infrastruc ture assets and retail operations abroad.
Azerbaijan plays a fundamental role in providing alternative hydrocarbons, both oil and gas, to Europe thus contributing to the energy security of European countries. The Southern Gas Corridor (SGC) is one of the most challenging energy projects in the world from the standpoint of its monetary value and work scope perspectives in the last decades. The SGC’s aim is to transport alternative gas from the Caspian region via a brand new transportation system to Europe. It stretches over 3,500km, crosses
six countries, deals with six regulatory systems, involves twelve investing compa nies and includes twelve gas buyers. The overall value of the project is around 40bn USD. What makes this project so special is that it is not just another way of re-routing existing supplies. Instead, this is the first project in several decades that will incor porate truly new gas supplies into South East Europe. Azerbaijan is the facilitator of this unique project and SOCAR, along with its international partners, has significantly progressed in the implementation of the project activities. First gas from Azerbaijan will reach the European market in 2020.
We consider Croatia as a direct and important participant in the Southern Gas Corridor and appreciate very much Croa tia’s contribution to the Ministerial Meet
ings of the SGC Advisory Council held in Baku in 2017 and 2018.
South East Europe and Western Balkan region are one of the priority destinations for SOCAR. SOCAR Balkans is a project management company established by SOCAR in 2014 to coordinate corporate strategies and business agenda and mobi lize corporate resources for projects execution in that region.
Since its establishment, SOCAR Balkans has explored potential avenues of business opportunities and partnership in the field of energy in Greece, Albania, Bulgaria, Monte negro, and, of course, Croatia. We continue our engagement with the regional energy companies to explore both commercial and technical feasibilities for gasification of Albania and Montenegro, gas distribu tion operations and technical services in Bulgaria, and further development of the Ionian Adriatic Pipeline project (IAP).
In February 2018, SOCAR Balkans and Albgaz have signed a Letter of Intent on the provision of front-end engineering design (FEED) for the transmission pipeline from Fier to Vlora. The pipeline connecting TAP exit in Fier with the Vlora thermal power plant was identified as the first Priority Investment Project as per the Gas Master Plan of Albania. SOCAR continuously supports the Government of Albania in the implementation of its plans to establish a gas market in the country.
Following the request from the Govern ment of Bulgaria, SOCAR Balkans began exploring opportunities for commercial investments in the development of a gas distribution system in Bulgaria. We are completing the preparations for the full scale feasibility study which would iden tify the best business solutions for our commercial presence in this sector.
IAP project continues to muster support from the Balkan countries and the European Commission as a project which will expand the borders of the Southern Gas Corridor deeper into the South East Europe. IAP is a project of the cross-European significance as its ulti
mate goal is to provide alternative gas to the region, to facilitate further strength ening of the energy security in South East Europe and Western Balkans, and to incorporate a new important element into the energy interconnectivity para digm which is being built across Europe. Another fundamental role of IAP is its constituent nature for the successful implementation of gasification projects
in Albania and Montenegro. We can say that IAP and Gas Master Plans of Albania and Montenegro represent one inte grated business value chain.
We highly value the level of partnership and cooperation between Azerbaijan and Croatia and between SOCAR Balkans and Plinacro in promoting IAP. In 2013, SOCAR and Plinacro signed a Memorandum of Understanding and Cooperation. In 2016, the Memorandum of Understanding and Cooperation between Albania, Croatia, and Montenegro was signed in Dubrovnik and the IAP Project Management Unit (IAP PMU) was established with the representa tion of Ministries and TSOs from Albania, Bosnia and Herzegovina, Croatia, Monte negro, SOCAR Balkans and Energy Community. SOCAR Balkans has an observer status in the IAP PMU and plays a technical consul tancy role in the project. The last meeting of PMU was held in Baku in February 2018 which resulted in signing of the Letter of Intent stipulating the establishment of the IAP Project Company towards the end of 2018. Once operational, the IAP Project Company will have a landmark importance in terms of meeting all required precondi tions to move forward the pre-execution stage. The IAP project is currently is in the project execution stage.
We are confident that the energy coop eration between Azerbaijan and Croatia and their energy companies will give addi tional impetus for to further expansion of areas of mutual interest and harmonization after the visit of His Excellency President of Azerbaijan to Croatia in September 2018.
