27-01-2012 12:28:17

Shah Deniz consortium could fall back on SEEP

The consortium of Azerbaijani Shah Deniz gas field development may fall back on the South-East Europe Pipeline (SEEP), if the pipeline partner is not chosen by late March, Reuters quotes BP Shah Deniz Development marketing manager Steve Garlick, as saying.

"If it can not choose a pipeline partner at the end of March, the group could fall back on its South-East Europe Pipeline to buy time to sort out any remaining issues", he said.

SEEP, which was proposed by BP, envisages gas transportation through existing or expanded infrastructure of Turkey to the Balkan Peninsula, and then the distribution of ten billion cubic meters (that Azerbaijan intends to sell on the European market in the second phase of development of the Shah Deniz gas condensate field) to small buyers, including Greece, Bulgaria, Serbia, Croatia and others via the existing gas pipelines system.

"We have put a lot of resource behind our own SEEP project just to make sure that we do have an option when we get to the middle of 2013 where you have to press the button on $15 billion plus of expenditure" for Shah Deniz II", Garlick said.

Garlick also expressed hope that the Shah Deniz consortium can propose a pipeline partner within weeks.

"We are moving towards hopefully forming a recommendation, certainly by the end of the first quarter," Garlick told the European Gas Conference in Vienna.

Three international consortia - Nabucco, TAP, and ITGI - are competing to build the infrastructure to carry gas from the giant field to Europe.

He also added that the consortium has not yet eliminated any suitors in the pipeline contest.

"Everyone is still in the running, very much," he said.

"None of the three projects is sufficiently de-risked that we would want to choose one of them," he added. "Each of them we feel needs to do some work."

Producers in the Shah Deniz II field, led by BP and Statoil, plan to ship 10 billion cubic meters a year through Turkey into Europe from 2017 or 2018.

TAGS: Azerbaijan, Shah Deniz gas field, South-East Europe Pipeline, BP Shah Deniz Development marketing manager Steve Garlick