Turkey favors Nabucco West as gas export route (UPDATE)
By Gulgiz Dadashova
Turkish Energy Minister Taner Yildiz has said that the project on gas transportation from the Caspian region to Europe - Nabucco West - is a more ambitious project than Trans Adriatic Pipeline (TAP).
Nabucco West and TAP are viewed as options to transport gas from the Azerbaijan's biggest gas field and one of the largest in the world - Shah Deniz.
Nabucco West is a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria. The project's shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary's FGSZ.
TAP project is 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. TAP's initial capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters. TAP's shareholders are AXPO of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).
The minister said that while choosing the final route for gas supplies to Europe, the economic benefits from transportation will be taken into account. "In this sense the Nabucco West project is more ambitious."
However, Taner added, it is the Shah Deniz consortium, who will choose the final route.
Nabucco West and TAP submitted their bids to the Shah Deniz consortium in late March.
In early April, BP Azerbaijan, the operator of the Shah Deniz project, reported that the consortium developing Azerbaijan's giant Shah Deniz field in the Caspian Sea has begun evaluating final offers it has received from Nabucco Gas Pipeline International GmbH (NIC) and TAP for transportation of Shah Deniz Stage 2 gas to Europe.
The company said the submissions allow the Shah Deniz consortium to conduct the final evaluation of each of the transportation options and make an informed decision on the preferred export route to European markets.
A final decision on the pipeline route is due to be made in late June.
The Shah Deniz field has a production capacity of 8 billion cubic meters a year from its first phase. It is predicted that in the second stage of field development, gas production can be brought up to 25 billion cubic meters a year.
Reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas.
The contract to develop the offshore field was signed in 1996. Shareholders of the project are: BP and Statoil with 25.5 percent each, NICO, Total, Lukoil and SOCAR with 10 percent each, and TPAO with 9 percent.
TANAP realization
Taner Yildiz also said that concrete steps, such as creating a legal framework and launching the land works, will be taken this year as a part of the Trans-Anatolian gas pipeline project (TANAP).
"At present, we are engaged in determining the exact route through which the TANAP pipeline will pass," he told journalists.
TANAP project envisages construction of the pipeline from the eastern border of Turkey to the country's western border to supply gas from Azerbaijani Shah Deniz gas field to Europe through Turkey. The initial capacity of the pipeline is expected to reach 16 billion cubic meters a year. About six billion cubic meters will be delivered to Turkey, and the rest - to Europe.
According to the minister, implementation of this project will benefit not only Turkey and Azerbaijan, but also the entire region.
A senior official of Azerbaijani state oil company SOCAR also told journalists on Monday that the work has been completed on the agreement on technical cooperation, but the work on other documents, particularly, the negotiations with partners, which will be included in the project, is underway.
Speaking about the date of signing of the agreement on the distribution of shares in the project, the SOCAR official stated that no specific date defined yet.
He added that the cost of the TANAP project could reach $10-11 billion.
Presently, a 20-percent share in TANAP belongs to Turkish BOTAS and TPAO, while 80 percent is owned by SOCAR. SOCAR intends to retain 51 percent of the equity in the project. Turkey will keep 20 percent of the equity.
SOCAR partners on Shah Deniz development project presented their preliminary intentions to acquire a stake in the TANAP project. According to preliminary data, the partners intend to distribute a 29 per cent share in TANAP as follows: Statoil and BP are to receive 12 per cent each and Total would get five per cent.