Turkey will keep 6 bcm/year of SD2 gas. It already receives that volume through the SCP from Shah Deniz Stage 1 development.

All three components of the Southern Gas Corriodor are to be completed in 2019, when the first deliveries of SD2 gas are scheduled to arrive in Europe. In total, the construction of the Southern Gas Corridor calls for 3,500 kilometers of pipeline, and its overall estimated cost is at around $40 billion.

There was a lot of competition, and several pipeline proposals were put forward to the Shah Deniz consortium for the contract to transport SD2 gas. Through the bidding procedure, the Nabucco pipeline, the Greece-backed Interconnector-Turkey-Greece-Italy (ITGI) pipeline and the South East Europe Pipeline (SEEP) were eliminated.

Instead of Nabucco, the section of the pipeline that would cross Turkey went to TANAP, which was supported by Azerbaijan’s state-owned oil-and-gas company, Socar. Currently, Socar holds 70% of TANAP. Turkey’s state-owned pipeline operator Botas and Turkish Petroleum (TPAO) together hold 30%. Socar is currently in discussions with BP, the Shah Deniz operator, regarding a 12% stake in TANAP. If the deal goes through, Socar’s share of the pipeline will fall to 58%.

For the BP-led Shah Deniz consortium and the SCP Co. shareholders, SD2 development and the SCP expansion (SCPx) will require an investment of around $28 billion. The existing SCP pipeline has a 42-in. dia and stretches 691 km—443 kilometers in Azerbaijan and 248 kilometers in Georgia. SCPx involves laying new pipeline and the construction of two new compressor stations in Georgia that will boost capacity to 20 bcm/year.

In its latest business update, BP Azerbaijan stated that a groundbreaking ceremony for the Southern Gas Corridor had been held on Sept. 20 at the Sangachal terminal. It also stated that most of the major engineering, construction and supply contracts for the expansion work, valued at $9.6 billion, had been awarded and that early works have begun at most construction sites across Azerbaijan and Georgia. Also, some pipes have been delivered to construction sites.

The awarded SCPx contracts cover pipeline construction in Azerbaijan and Georgia; line pipe coating, construction and commissioning of the SCPx project facilities in Georgia; pipeline and facilities engineering and project management services for the Georgia section of the SCPx; horizontal directional drilling and line pipe installation for five river crossings for the Azerbaijan section of the SCPx; and shaft and tunnel construction and line pipe installation for two river crossings of the SCPx (one in Azerbaijan, one in Georgia), according to the BP Azerbaijan report.

Last May, the Shah Deniz consortium and SCP Co. awarded a $735-million contract for pipeline construction in Azerbaijan and Georgia to Saipem/Azfen, a joint venture of Saipem Contracting Netherlands BV and Azfen JV.

SCPx work is to get underway in January 2015. Mechanical completion of the Georgia section is due to be finished by the end of 2016 and the Azerbaijan section by the end of 2017.

The scope of work for the Saipem-Azfen contract calls for the construction of a 428-km pipeline loop and associated aboveground installations, including block valves, a pigging facility and tie-ins in Azerbaijan and Georgia, as well as a 59-km-long second pipeline loop and associated aboveground installations in Georgia.