Azerbaijan Gas Supply Company

Azerbaijan Gas Supply Company Limited (AGSC) is a company incorporated in the Cayman Islands, with its head office located in Baku, Azerbaijan. AGSC was established in 2002 by Shah Deniz PSA partners and the State of Azerbaijan (represented currently by SOCAR), as a special purpose vehicle to sell gas volumes produced from Shah Deniz field to Azerbaijan, Georgia, Turkey as well as gas sales to Europe through the Southern Gas Corridor. AGSC operated by SOCAR manages 24/7 natural gas sales operations conducted from its Baku office.

AGSC represents the interests of Shah Deniz project partners.

Participation interests of the Shah Deniz project partners in AGSC

Gas sales operations started in 2006 with the first gas produced under Stage 1 of the Shah Deniz field development (SD 1). By 2022 the company has grown its sales from 3 billion cubic meters to 24.6 billion cubic meters annually (bcma). AGSC portfolio at plateau level will be reaching more than 25 bcma.

Shah Deniz Project

The Shah Deniz Contract Area is a high pressure gas-condensate field located in the Azerbaijani sector of the Caspian Sea, on water depths ranging from 50 to 500 m. Production Sharing Agreement (PSA) for exploration, development and production of Shah Deniz prospective area in the Azerbaijani sector of the Caspian Sea was signed between SOCAR and relevant international oil and gas companies on 4 June 1996.

Natural gas from the Shah Deniz field is transported first via subsea pipelines to the Sangachal Terminal located on the coast of the Caspian Sea 55 kilometers south of Baku. From the Sangachal Terminal’s gas processing facilities, after the necessary processing, the natural gas is then transported into Azerbaijan’s national grid system and to South Caucasus Pipeline (SCP) of 692 km length laid until Turkey passing via Georgia.

Full-field development of Shah Deniz gas-condensate field or Shah Deniz Stage 2 (SD 2) sanctioned in 2013 is one of the largest and most complex gas projects in the world and the first subsea infrastructure in the Caspian Sea. SD 2 added another 16 bcma of natural gas to the volume produced from SD 1 Project. 6 bcma of gas produced from SD 2 is supplied to Turkey, while around 10 bcma to the European consumers under long term sales arrangements, thereby serving strategic interests related to sustainable energy security of the European countries and Turkey.

AGSC is now acting as a shipper and seller of Shah Deniz gas across 4 interconnected gas transportation systems to more than 15 buyers in 6 different countries. AGSC has secured long term transportation capacity in:

  • SCP system, which was expanded for the purpose of transporting also the SD 2 volumes. Initially linked to BOTAŞ grid only, the pipeline is now also connected to Trans-Anatolian Gas Pipeline (TANAP) system at the Georgian-Turkey border, thus enabling the transportation of natural gas to Turkey and further to Europe;
  • TANAP system, which connects directly to SCP at the Georgia-Turkey border and to Trans Adriatic Pipeline (TAP) at the Turkey-Greece border. TANAP system was commissioned in two phases:
    • Mid 2018 – SD 2 gas entered the Turkish gas market
    • End of 2020 – start-up of SD 2 gas transportation to Europe. The pipeline, with initial transportation capacity at about 16 bcma and expandable up to 31 bcma, has two exit points in Turkey
  • TAP system connects directly to TANAP at the Turkish-Greek border and transports natural gas via Greece and Albania, across the Adriatic Sea to the southern part of Italy. TAP has exit point and connection with Interconnector Greece-Bulgaria (IGB) pipeline, the system to connect with Bulgarian national grid. The pipeline became operational in 2020. Initial transportation capacity is 10 bcma, expandable to 20 bcma; and
  • SNAM system – Italian national grid allowing access to the Punto di Scambio Virtuale (Virtual Trading Point – PSV) organized and managed by SRG.