YEREVAN, JUNE 29, ARMENPRESS. Around 20 billion dollars in investments in the Shah Deniz 2 huge gas project, under which Azerbaijan plans to export gas to Turkey and Europe, are made by Azerbaijan itself.

Azerbaijan has already taken 8-10 billion dollars in loans for the project, and continues to take additional resources.

Currently the average European price for 1000 cubic meters of natural gas is 240 dollars.

“After the US’s entry to the European market, the volume of supplied gas to Europe in the upcoming five years will increase by 80 billion cubic meters. In such conditions, most probably the price for 1000 cubic meters of gas in 2020 will become 200 dollars in Europe”, economist Natig Jafarli said while commenting on Shah Deniz 2.

According to other Azerbaijani experts, as part of this project Azerbaijan will be able to supply 10 billion cubic meters of gas to Europe in 2020 annually, the total revenue of which will amount 2 billion dollars, and if the industrial and other expenditures are calculated from this amount, the best benefit for Azerbaijan might be around 600-700 million dollars.

The picture is the following: Azerbaijan invests 20 billion dollars in the Shah Deniz 2 project, 8-10 billion of which through loans from Europe, and it will receive an annual of 600-700 million dollars in incomes, most of which will be spent on repaying the credit interest rates.

It is also noteworthy that the loans which are provided to Azerbaijan are mainly coming from Europe, and Europe, except of its interests in the project’s operations, will also benefit from the interest rates of the loans.

In terms of Europe, its goal isn’t as much as getting yearly 10 billion cubic meters of gas from Azerbaijan, as it is the construction of a gas pipeline with Azerbaijan’s financial participation, which will enable the supplies of 32-35 billion cubic meters of gas annually, and this pipeline can be used by Europe in the future with other countries as well – for instance Israel, Cyprus, Iraq and Iran.

Another dangerous fact for the Azerbaijani economy is that the foreign companies who invsted in the project will try to get back their money in the initial period of the operations, in addition no increase of oil prices if forecast in the international market for the near future, but rather the opposite.

It is more than obvious that the Shah Deniz 2 gas project, which Azerbaijan’s leadership presents to be as the main tool to save the country’s economy, might most probably have an adverse effect.

Article by Aren Petunts