AZERBAIJAN SPOTLIGHTS GAS INDUSTRY CHALLENGES
By Abid Godja ogly Sharifov
Chairman of State Construction of the Azerbaijan Republic, Vice Prime Minister of the Azerbaijan Republic, Honored Builder of the Azerbaijan Republic.
A,G,Sharifov was born in Sheki on January 6,1940. From 1947 to 1957 he has been a student of high school No 10 in Sbeki. In 1957 he went up to Technical Institute of Azerbaijan he left In 1962.
Trained as an engineer builder. From 1962 to 1978 has worked In GlavBakStroy (Head Office of Construction Works in Baku) successively as site foreman, site engineer, senior site engineer, manager of division, general engineer of construction department. From February 1978 to July 1980 he has been senior reviewer of construction division at Administra-tive Department of the Azerbaijani Government. From 1980 to 1989 he is manager of Trust of Azertransstroy. From 1988 to 1991, he is In charge of design-ing and production construction asso-ciation of the Azertransstroy group. From the year 1991 to 1992 be has worked in Turkey as deputy manager of construction department for electrification of the Cherkess-Kapykaly railway.
The 1993-1995 period - President of the state-owned company Azertransdorstroy.
From 1995 to the present time -Chairman of Gossstroy of the Azerbaijan Republic, vice Prime Minister of the Government of the Azerbaijan Republic.
A.G.Sharifov headed the construction of such important facilities of the republic as the building of the Presidency, the building of Ministry of National Security, the Absheron Hotel, railroad running from Eviakh to Belokany ans so on.
Married, has two children.
One of basic moments in the cause of the Great Silk Way recovery was certainly the inter-national Conference in Baku, which was held on September 7-8,1998 and a Main agreement on transport, which was adopted at it. The ways of how to carry the agreement into effect were outlined in an appropriate decree by His Excellency President of the Azerbaijan Republic.
By way, the accord was enacted into law by Azerbaijan, Georgia, Tajikistan, Uzbekistan, Bulgaria and entered into effect on May 23, 1999. Ukraine and Romania also get the docu-ment ready for ratification. For some while past there is some growth in an interest in the pro-ject on the party of other countries, including the USA. On July 14, 1999 Law on the Great Silk Way strategy was passed by the US Congress. The exclusively economic strategy certainly aims at expansion of mutual cooperation between Europe and Asia. We hope that it will further a peace settlement of armed con-flicts, including the conflicts in the Caucasus.
Before this year is out, in Tbilisi it is planned to hold the first organization meeting on TRACECA. On September 28 this year in Brussels the European Union issued an appro-priate tender. A work on setting up TRACECA's Secretariat was begun and European Union allocated $1.1 million for these purposes. Azerbaijan allocated a business premises for the body accommodation.
From 1996 up to today about 9 million tons of goods have been transported via the EuroAsian corridor. For example, if in 1995 the amount of the freight movement surged up to 396,000 tons of cargo, in 1998 the figure exceeded 4.2 million tons. The amount of this year's freight movement is expected to be about 5 million tons. Crude oil carried through the Aktau-Batumi route accounts for around 60 percent of all goods transported.
The earnings of the republic's transport sector from the corridor amounted to around US$42 million. As it was provided by the multifaceted Main Agreement, we much watered down tax procedures, repealed VAT, expanded a variety and the number of goods to be carried. We also take measures to ensure the security of the cargoes moved and their delivery in time.
This July we conducted a meeting in Aktau with transport ministers of Georgia and Kazakhstan. On the basis of its results, an intergovernmental Memorandum on creating of favorable conditions for the transit of all kinds of cargoes via the states. The Kazakh party was also committed to considering the oppor-tunity to add a reservation pertaining preferential fees to the Main Agreement.
A number of actions was slated to cut harbor fees, to deepen the seabed and renovate the ferry passage at the port of Aktau. A towboat was leased by the port of Aktau from Azerbaijan. We also agreed to form a joint trilateral commission on the matters that are of no delay. As a result, from July 1 this year a ship has been plied once a week through the Baku-Aktau route. In the past three months over 100 cars (2,000 tons of cargo, mainly foods) and about 3,000 passengers were carried by the ship.
When we speak about the outlooks and problems of oil and gas sector, the questions dealing with crude oil production, transport and export are above all raised. In doing so, the challenges of gas industry as if recede in the background. Objectively, it is explained by what the amount annually produced gas in the coun-try is only 6 billion cubic meters. The amount can hardly meet the republic's domestic needs.
The present things start to turn around. The results of some studies carried out in the Caspian Sea offshore Azerbaijan by experts from the world's major oil companies show that there are significant gas reserves here. It is enough to say that only the natural gas reserves in the Shah-deniz are estimated at over 700 billion cubic meters. Given the realities, Azerbaijan President Heydar Aliyev has signed an order to set up a working group to solve problems relevant to the organization of gas export to world markets from the Shah-deniz the area off Azerbaijan's Caspian coast. Socar's execs, the representatives of foreign oil companies that are members of the Shah-deniz consortium as well as A.Asadov, an aide to Azerbaijan President were included in the group. I was commissioned to lead the group.
According our experts' opinion, Turkey is the most promising and real market for Azeri gas. In doing so, Georgia will be a transit country. To fully meet the republic's domestic needs for gas and to tap into world markets, it would be better to carry out the work in two phases.
* The first phase includes renovation of the Azerbaijani and Georgian gas transport system. It encompasses the upgrade and refurbishment of the Kazi-Magomed - Kazakh gas pipeline long 416km within Azerbaijan up to the border with Georgia, the Kalmass underground gas storage facility and that of three compres-sor stations as well as the construction of a 1220 mm new gas pipeline.
In the territory of Georgia one will have to refurbish a gas pipeline section running from the border with Georgia to the Saguramao compressor station, involving the upgrade of the compressor station itself. It is also needed to build a gas pipeline stretching from Saguramo to the Turkey-Georgia border. Emphasis is laid upon what the works completed will allow to improve gas supply of the residents of the republic's regions lying along the gas line.
* The second phase provides for the construction of the new Karadag (Sangachaly) -Kazakh - Georgia - Erzerum (Georgia) export gas pipeline having a diameter of 1420mm. It will enable to export about 30 billion cubic meters of gas per year.
We have taken first moves to establish contacts with appropriate organizations of Turkey and Georgia.
It is evident that we will have to have a long negotiating process, in which the experience acquired by Azerbaijan in talks over the Main Export Pipeline project will play a great role.