Azernews.Az

The consortium of Azerbaijani Shah Deniz gas field development selected Nabucco West as the single pipeline option for the potential export of Shah Deniz Stage 2 gas to Central Europe, a joint statement of BP and SOCAR says.

According to the statement, published last Wednesday, development of the South East Europe Pipeline (SEEP) project, which had been assembled by Shah Deniz partners in collaboration with Bulgaria, Romania and Hungary, will cease.

Thus, the partners on the project continue to consider two options for possible gas export routes - Nabucco West and Trans Adriatic Pipeline (TAP). TAP is designed to deliver gas to Italy and later to Western Europe. Earlier, the shareholders ruled out the Interconnector Turkey-Greece-Italy (ITGI) pipeline project.

The decision was made on the basis of the publicly communicated selection criteria announced in 2011.

``In particular, the greater maturity of Nabucco West gave the consortium confidence that this project could be developed and delivered on the same timeline as Stage 2. The consortium will now cooperate with the Nabucco West project to optimise its scope, its technical studies and its commercial offer,`` the statement says.

President of Azerbaijani state oil company SOCAR, Rovnag Abdullayev, said, ``This decision constitutes a significant step towards implementation of the Southern Gas Corridor Strategy which would serve the strategic interest for sustained energy security of European countries as well as Azerbaijan, Georgia and Turkey.``

Nabucco Gas Pipeline International GmbH Managing Director Reinhard Mitschek said in a statement that Shah Deniz consortium`s decision on Nabucco West is an important milestone for the project.

``This decision is an important milestone for the Nabucco project and a major step towards the final investment decision,`` Mitschek said.

According to Mitschek, Nabucco delivers freedom of choice to gas consumers and will contribute considerably to the security of supply in Europe.

``We look forward to a successful cooperation with the producers,`` he added.

Nabucco West is a short-cut version of Nabucco project. Gas to be produced within the second phase of Shah Deniz gas field development is considered as the main source for the project. The 1,300 km 48`` gas pipeline will transport gas from the vicinity of the Turkish-Bulgarian border through Bulgaria, Romania and Hungary to Austria with off-take stations in each transit country. Nabucco West will follow the same principles as the original Nabucco concept. This means that the pipeline will be designed to be a scalable and multisource natural gas transmission infrastructure. Capacity could be scaled up from 10 bcm up to 23 bcm to respond to demand.``

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

TAP is one of the Southern Gas Corridor projects, designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into Western Europe. The initial capacity of the 800 kilometer pipeline will be 10 billion cubic meters per year, expandable to 20 billion cubic meters.

TAP`s shareholders are EGL of Switzerland (42.5 percent), Norway`s Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

The final decision on a pipeline route to export Azerbaijani gas to European markets is expected to be made by the Shah Deniz consortium in 2013.

The Shah Deniz field, with estimated reserves of 1.2 trillion cubic meters, is being developed by the consortium consisting of world energy majors including BP (operator) and Statoil, holding 25.5 per cent stakes each, as well as NICO, Total, LukAgip and SOCAR (10 per cent each), and TPAO with nine per cent.

Two options

The consortium of the Nabucco gas pipeline project is confident in offering the most attractive option to transport Azerbaijani gas to European markets, the Nabucco International spokesman told the Baku-based Trend news agency.

``Nabucco is confident in offering the most attractive commercial and strategic package to the producers and therefore we are very optimistic that Nabucco will be the outlet for Azerbaijani gas to Europe,`` Christian Dolezal said.

Dolezal said that the next steps toward the implementation of the project will be finalizing the environmental and social impact assessments, as well as further negotiations with the partners in the Shah Deniz consortium.

Meanwhile, the Managing Director of the rival TAP project said it is the Trans Adriatic Pipeline that is the most advanced of the two potential projects on transporting Azerbaijani gas to Europe, especially in terms of financing and permitting.

``We believe that its clear economic, commercial, technical and strategic advantages make TAP the strongest contender in this competition and the best option for both Europe and Azerbaijan,`` Kjetil Tungland said in a statement.