Germany’s Bayerngas stops talks with Nabucco but work in full swing
By Aynur Jafarova
Germany's Bayerngas company has stopped talks with the Nabucco consortium on joining the gas pipeline project, Reuters reported on Monday.
Bayerngas said the company was adjusting its strategy and was more focused on investing in pipelines in Germany.
In late September 2011 Nabucco Gas Pipeline International GmbH (NIC) announced Bayerngas' intention to become the seventh shareholder in the Nabucco project. The project's current shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary's FGSZ.
Later, in the summer of 2012, the sides were announced to make a short break in talks because of changes in the company's executive board. However, in early fall Bayerngas reportedly sought to continue the talks and to join the project.
Although Bayerngas has stopped talks with the Nabucco consortium, work on the Nabucco gas pipeline project is in full swing.
The NIC has signed a contract with Italian contractor Saipem to perform Front End Engineering and Design (FEED) services for the Nabucco West project, the NIC reported on Monday.
According to the NIC, Saipem has been selected as the appropriate provider of these services based on a competitive tender process launched in September 2012.
"The contract includes all the FEED activities for the 48 inch diameter, 1,326 km pipeline system. This includes strategic analysis of data and information to conduct appropriate risk assessments and allocation of resources across the pipeline to ensure the continued successful development of the project," the NICsaid.
"This re-feed for the Nabucco West project is being conducted following the selection of the project as the Central European route by the Shah Deniz consortium in June last year," the NIC said. This work will build upon existing engineering work already completed for the 56 inch diameter, 3,900 km Nabucco classic route.
Currently, the consortium on developing Azerbaijan's Shah Deniz
field in the Caspian Sea considers two options to deliver its gas
to Europe - Trans Adriatic Pipeline (TAP) and Nabucco West. The
final decision on a pipeline route will be made this year.
In January 2013, the Nabucco shareholders signed a Cooperation
Agreement, as well as an Equity Option and Funding Agreement, with
the shareholders of the Shah Deniz gas field.
Equity Option and Funding Agreement, in particular, envisages joint funding of the development costs of Nabucco West up to the pipeline selection decision for Shah Deniz' European export route, as well as the granting to potential investors of equity options of 50 percent to participate as shareholders in the NIC following a decision by the Shah Deniz Consortium in favor of Nabucco West.
Nabucco West is a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria. Gas to be produced within the second phase of Shah Deniz gas condensate field development is considered the main source for the project. As a central component of the Southern Gas Corridor, Nabucco West is ideally placed to diversify gas supply to over 500 million potential customers in the growing economies of south-eastern Europe as well as onward into western Europe.