Azernews.Az

ROME – Securing a deal for gas supplies from the Shah Deniz field in Azerbaijan could allow the developers of the Interconnection Turkey Greece Italy (ITGI) to complete the project's final investment decision (FID) this year, a representative for Italy's Edison told ICIS Heren on Tuesday.

"The final investment decision depends on the supply contracts," said Elio Ruggeri, head of international gas infrastructure at Edison. "As soon as we finalise the Shah Deniz supplies, we could make a final investment decision."

The Shah Deniz consortium plans to make a FID on phase II of the project by mid-2011 (see ESGM 9 November 2010). ITGI is competing with the Nabucco and South Stream projects for the Azerbaijan supplies.

"Of course we are very confident of our chances of securing volumes from Shah Deniz," Ruggeri said. "We believe that ITGI is the most advanced project in the southern corridor and the most competitive project."

Edison is negotiating to secure 6.4 billion cubic metres (Gm³)/year from the Shah Deniz field to Italy, he said. Greece's Depa, its ITGI partner, is hoping to score another 1.6Gm³/year.

The next year will be a big one for the ITGI pipeline, with most preparations for construction expected to be completed by December, Ruggeri said.

In particular, the ITGI developers plan to carry out a €10m detailed marine survey to evaluate the seabed between Italy and Greece, where they plan to lay the IGI Poseidon offshore link between the two countries.

Procurement of the pipeline, which will cost €200m, is expected to begin in March, allowing them to start installing it at the end of the year, Ruggeri said.

The Italian environment ministry approved the pipeline in August, after determining that it can help strengthen both Italy's and Europe's energy supplies.

Edison, Depa and Bulgarian Energy Holding also created a joint venture last year that will develop, construct and operate the pipeline between Greece and Bulgaria.

With this agreement in place, the Greece-Bulgaria branch could start operating by late 2014 or early 2015, Ruggeri said.

The entire ITGI project, meanwhile, could begin operating in 2015, as long as construction starts in 2012.

However, the project's developers plan to pace the pipeline's launch with the availability of Shah Deniz supplies, which are currently expected for late 2016 or early 2017, said Ruggeri.

"The important thing is that the status of our project will not cause any delay to Shah Deniz," he said.

Ruggeri rejected last year's speculation that ITGI could partner up with the rival Gazprom-led Nabucco pipeline, at least in the short-term.

"We acknowledge the strategic value of Nabucco, however we consider Nabucco to be not yet ready to start, because of the lack of supplies from Caspian countries," he said. "ITGI and Nabucco could cooperate if Nabucco comes at a later time, but cooperation depends on the viability of Nabucco. ITGI is surely viable, Nabucco is not yet certain."

Edison had said in September that the two projects could cooperate if they were built simultaneously.

ITGI requires the construction of an 800km link between Italy and Greece, an interconnector between Greece and Bulgaria and upgrades on the existing Turkish Grid and Turkey-Greece interconnection. Nabucco, on the other hand, calls for the construction of a 3,300km network of pipelines.