UPDATE 1-Azeri gas project backers sign final investment pact
BAKU, Dec 17 (Reuters) - Backers of Azerbaijan's Shah Deniz II gas project signed a final investment decision on Tuesday, with a view to pumping natural gas to Europe from 2019, while Norway's Statoil made the surprise announcement it was cutting its stake to 15.5 percent.
Azeri President Ilham Aliyev told a ceremony in the capital Baku that the project "will change the energy map of our region and help the historical development of our country."
The documents signed in Baku include an investment decision on Shah Deniz II, as well as the Trans-Anatolian (TANAP) and Trans-Adriatic (TAP) gas pipeline projects. Combined, the projects will cost $35 billion, Aliyev said.
The project will offer a vital alternative source of gas to Europe, which imports more than a quarter of the fuel that it burns from Russia.
From Oslo Statoil said it was cutting its 25.5-percent stake in the project by 10 percentage points, selling to partners BP of Britain and Azeri state energy firm SOCAR for $1.45 billion in cash. BP will buy 3.3 percent and SOCAR 6.7 percent.
The announcement by Statoil was a surprise as an official statement by the consortium, which includes Total, was expected later on Tuesday.
"It's a complete assessment of the risk, the exposure and the possibility of earnings from our portfolio, and for us the right stake is 15.5 percent in this project," Statoil spokesman Knut Rostad told Reuters.
The company added that the project will cost some $28 billion, while BP Azerbaijan and the consortium said SOCAR and its partners in Shah Deniz II agreed to extend terms for the project by 13 years to 2048.
From around 2019 Shah Deniz II is expected to supply 16 billion cubic metres (bcm) per year to Europe. Of that, 10 bcm are earmarked for Europe and the remaining 6 bcm for Turkey.