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 market gas volumes produced from Shah Deniz field to Azerbaijan, Georgia, Türkiye 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 commenced in 2006 with the first gas produced under Stage 1 of the Shah Deniz field development, initially supplying the domestic market in Azerbaijan as well as markets in Georgia and Türkiye. By 2023, the company has significantly expanded its sales, growing from three billion cubic meters (bcm) annually to approximately 26 bcm, and has also entered the EU market.
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 km 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 for supplies to local market and also to the South Caucasus Pipeline (SCP) of 692 km length laid until Türkiye passing via Georgia.
The full-field development of the Shah Deniz gas-condensate field, also known as Shah Deniz Stage 2 (SD2), which was sanctioned in 2013, is one of the largest and most complex gas projects globally. It represents the first subsea infrastructure in the Caspian Sea. This project significantly expanded production, adding over 16 bcm per annum of natural gas to the output from the Shah Deniz field, thus underpinning the development of the Southern Gas Corridor.
AGSC is now acting as a shipper and seller of Shah Deniz gas across four interconnected gas transportation systems to buyers in six different countries. The number of buyers in the Company’s portfolio is expanding with AGSC strengthening its presence on the spot market.
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 Georgia-Türkiye border, thus enabling the transportation of natural gas to Türkiye and further to Europe;
- TANAP system, which connects directly to SCP at the Georgia-Türkiye border and to Trans Adriatic Pipeline (TAP) at the Türkiye-Greece border.
- 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 also exit point and connection with Interconnector Greece-Bulgaria (IGB) pipeline, the system to connect with Bulgarian national grid.
- SNAM system (SRG)– Italian national grid allowing access to the Punto di Scambio Virtuale (PSV).