Nabucco proposes Shah Deniz consortium 50-percent stake in project (UPDATE)
By Arslan Abbasov
Nabucco West has offered the consortium of Azerbaijan Shah Deniz field development a 50- percent share in the project, CEO of Nabucco Gas Pipeline International GmbH Reinhard Mitschek told journalists in Baku on Monday.
"This package of proposals has been agreed in a mid-January," Mitschek said.
Mitschek said that in late March Nabucco Gas Pipeline International GmbH has submitted a Pipeline Decision Support Package to the Shah Deniz Consortium, which contains all of the important elements requested by the producers to establish a commercial value chain for Azerbaijani gas.
Mitschek expressed the hope that both sides will be satisfied with the offers.
Nabucco West is a short-cut version of Nabucco project, which envisages construction of the pipeline from the Turkish-Bulgarian border to Austria. Gas to be produced within the second phase of Azerbaijani Shah Deniz gas condensate field development is considered as the main source for the project.
The project's current shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary's FGSZ.
The final decision on the pipeline route to transport Azerbaijani gas to Europe will be made in June, 2013.
Mitschek said further that the interest in the Nabucco West project is growing, and more companies are interested in joining it.
"We expect the accession of the four Shah Deniz consortium's companies - SOCAR, BP, Statoil and Total, and we also have another European company which is very interested in joining the Nabucco consortium," Mitschek said.
However, he did not disclose the name of the company due to confidentiality reasons.
Mitsches also added that Germany's RWE has left the consortium, and the Austrian OMV took the shares for intermediate period.
Talking about the advantages of Nabucco West over TAP (Trans Adriatic Pipeline), Mitschek said the first one will link the Shah Deniz consortium directly with the Central European gas hub.
"With this gas hub, the Shah Deniz consortium can reach 140 potential gas buyers that are registered market participants at the hub," Mitschek said.
According to Mitschek, the second big advantage of Nabucco West is that via this pipeline the Shah Deniz consortium can reach not only the Nabucco countries along the route (Bulgaria, Hungaru, Romania, Austria), but the West and Balkan countries, like Serbia, Croatia, Bosnia and Herzegovina, Slovenia and others by linking the existing national grids.
Mitschek also stressed that the Nabucco West project has very stable and robust legal framework with an Intergovernmental Agreement (IGA) which was not only signed, but also ratified by all national governments.
"With the ratification the IGA becomes a treaty with the validity of 50 years, and that is the perfect basis for financing," Mitschek said.
He also added the capacity of the Nabucco West pipeline can be easily expanded from 10 billion cubic metres (bcm) to 23 bcm.