Turkey and Azerbaijan are going to sign today an inter-governmental agreement in Istanbul on construction of Trans Anatolian Pipeline (TANAP).

TANAP pipeline will carry up to 16 billion cubic metres a year of gas from Azerbaijan’s Shah Deniz gas field through Turkey as far as its European borders.

The project is in direct competition with the multinational Nabucco pipeline project sponsored by a consortium that includes OMV and RWE and is backed by the European Commission, Russian Nezavisimaya Gazeta writes.

Turkey’s Prime Minister Recep Tayyip Erdogan, President of Azerbaijan Ilham Aliyev are expected to participate in the signing ceremony. The Russian newspaper says two documents are expected to be signed in Istanbul – the above mentioned inter-state agreement and a trade agreement on creation of gas pipeline consortium.

The founders of the consortium will be Azerbaijani State Oil Company with 80 per cent shares, Turkish Botas oil state gas company and Turkiye Petrolleri oil company with 20% shares. In future international oil-gas companies may join the consortium.

“We are going to solve all the issues connected with the project and without losing time pass to construction works so that the new pipeline be ready by 2017,” Rovnag Abdulayev, chairman of the Azerbaijani state oil company said.

The length of the pipeline will be 2 000 kilometers. The pipeline that starts from Azerbaijan will stretch to either Greece or Bulgaria through Turkey’s territory.

The first round of construction is said to cost $7-8 billion.