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Azerbaijan determines broker on placement of Southern Gas Corridor second issue of bonds

July 30, 2014



Baku, Azerbaijan, July 30

By Emil Ismayilov -Trend:

The new issue of Canub Qaz Dehlizi's bonds ("Southern Gas Corridor") to the amount of $1.2 billion was put for mass sale at the Baku Stock Exchange (BSE). "InvestAZ" company was chosen the broker of the acquirer, InvestAZ said on July 30.

The total volume of the issue is $1,246,355. Its prospectus has been recently registered by the Azerbaijani State Securities Committee. Some 12,463,550 bonds with a nominal value of $ 100 each were issued within the issue, according to the statement.

The maturity is 720 days (two years) with a yield - a six-month Libor plus one percent. The interest will be paid in every six months.

Earlier, the State Oil Fund of Azerbaijan purchased a total volume of primary issue bonds of the "Southern Gas Corridor" ("Canub Qaz Dehlizi") CJSC to the amount of $917,320,800, according to the broker of the acquirer - INVESTAZ Company. The turnover period is 10 years, with a yield of six-month Libor +1 percent. Interest payments will be carried out every six months.

Azerbaijani President Ilham Aliyev signed a decree in February establishing a closed joint-stock company (CJSC) for effective management of projects within the second phase of Shah Deniz gas and condensate field's development, expansion of the South Caucasus Pipeline, Trans-Anatolian Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP). The closed joint stock company will be 51 percent state-owned and 49 percent owned by the State Oil Company of Azerbaijan.

The State Oil Fund of Azerbaijan (SOFAZ) has been instructed to provide equity financing for the CJSC, which is under direct state ownership. The funds remitted to the CJSC for financing the equity will provide a long-term return on investment.

Gas will be supplied as part of the Southern Gas Corridor. This project will allow Europe to diversify its hydrocarbon source supply and increase its energy security, while Azerbaijan opens a new market in Europe.

The final investment decision was made on the second phase of the Azerbaijani Shah Deniz offshore gas and condensate field's development on December 17, 2013. Some 10 billion cubic meters of gas from the field will be supplied to the European market.

The contract for development of the Shah Deniz offshore field, which has proven reserves of 1.2 trillion cubic meters of gas, was signed on June 4, 1996.

The share distribution among the participants of the agreement is as follows (after SOCAR and BP bought some Statoil share in the project): BP (operator) - 28.8 percent, Statoil - 15.5 percent, NICO - 10 percent, Total - 10 percent, Lukoil - 10 percent, TPAO - 9 percent, SOCAR - 16.7 percent. Earlier, "Total" sold its stake in the project of the Turkish TPAO. After the transaction is over, the share of Turkish TPAO in the project will be 19 percent.


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Source: Trend News Agency (Azerbaijan)


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