EBRD, LUKoil Sign Credit Agreement on Azerbaijan Projects

The European Bank for Reconstruction and Development (EBRD) and Russian LUKoil Overseas Holding Limited Company signed two credit agreements on major energy projects in Azerbaijan.

One of them covers operation of major Azeri gas and condensate field Shahdaniz, while the other one – the project on building the South Caucasus Pipeline (SCP) that will take Azeri gas to Turkey through Georgia.

EBRD is to allocate loans worth $180 million to Lukoil Overseas for a 12-year term, Russian media reported. The interest rates are not reported.

According to EBRD estimates, Phase 1 of the Shahdaniz project will cost $2.777 billion. The first SCP gas is to reach Turkey by the winter of 2006.

The SCP is the Azerbaijan-Georgia section of the Baku-Tbilisi-Erzurum (BTE) major gas pipe.

442km of the BTE pipeline goes through Azerbaijan and 248km via Georgia. The construction operations in both countries are overseen by the SCP Company and funded by the project partners. The construction of the 270-km Turkish section of the pipeline is funded by this country.