Nabucco expects extra gas sources for the project

Nabucco West gas pipeline, one of the potential export routes for Azerbaijani gas to Europe, expects additional sources of gas for the project, Nabucco`s managing director, Reinhard Mitschek, said during a conference call last Friday.

``Sooner or later we may also see gas from Turkmenistan and Iraq. Nabucco West will be ready to take also this gas for European markets,`` Mitschek said.

According to Mitschek, Nabucco West - which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria -- may expect several billion cubic meters from these two countries in addition to the gas from Azerbaijan. He also believes that the investment of Trans Anatolian gas pipeline (TANAP) and Nabucco West will encourage other producers to exploration and production activities in the Caspian region and Middle East.

TANAP, designed to transport Azerbaijani gas from the eastern border of Turkey to its western part, is to be connected to the Nabucco West pipeline. On June 26, Azerbaijan and Turkey signed an intergovernmental agreement on the TANAP project.

Mitschek stressed that the primary source for Nabucco West is Azerbaijan, in particular, gas which will be produced during the second phase of developing the Shah Deniz field in the Caspian Sea. However, Mitschek said that there are several other fields in Azerbaijan which are very promising and as additional sources, gas produced there could also be transported via Nabucco West to European markets.

With regard to the pipeline capacity, Mitschek said that minimum volumes that Nabucco West will transport amount to 10 billion cubic meters. However the capacity can be easily expanded to 14 or 20-23 billion cubic meters per year.

The Shah Deniz II partners last Thursday selected Nabucco West, a scaled down version of the Nabucco pipeline project, as one of two possible routes to carry Caspian gas to Europe, alongside a rival route across Greece and Italy called the Trans-Adriatic Pipeline (TAP), BP said. The final decision on a pipeline route is expected to be made in 2013.

Nabucco`s shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary`s FGSZ.

Mitschek said further that Nabucco West will start negotiations on cooperation with TANAP this summer.

``In this summer period, we will start talks with TANAP on all technical aspects of cooperation,`` Mitschek said.

Mitschek said that Nabucco West will now start deeper and detailed negotiations with the Shah Deniz consortium on various aspects of the project.

``We will align our project schedule with the schedule of Trans Anatolian Pipeline and of the Shah Deniz exploration and production project,`` Mitschek said.

He added that all Nabucco shareholders, including Turkish BOTAS and Germany RWE, are very committed to the project, and having a stable shareholder group is a major advantage.

Talking about new potential shareholders in the project, Mitschek said that the consortium is currently negotiating with the German Bayerngas, which is expected to conclude due diligence process in the nearest future.

``I don`t rule out that other European market players will be interested in the future to become a shareholder of the project,`` Mitschek said, adding that one of the Shah Deniz partners could also be among the interested parties. A new partner in the project, according to Mitschek, may appear by the summer or fall this year.