TAP, Nabucco and SEEP still in EU pipeline race
Now Reading: TAP, Nabucco and SEEP still in EU pipeline race

PUBLISHED  09:33 February 21, 2012

By Kostis Geropoulos

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
What's this?

On 20 February Shah Deniz, the consortium developing the field in the Azerbaijani area of the Caspian basin, excluded the Interconnector Turkey-Greece-Italy (ITGI) project from those being considered to carry its gas to Europe, BP said.

“Originally there were four options to carry Shah Deniz gas to Europe: TAP [Tran-Adriatic Pipeline], ITGI, SEEP [South-East Europe Pipeline] and Nabucco and now there are three. ITGI is out basically,” BP spokesman Toby Odone told New Europe.

Shah Deniz II, an important for Europe’s strategy of diversifying energy supplies, is expected to add roughly 16bn cubic metres of annual production as early as 2018, 10bn cubic metres of which would be ready for export to the European Union. BP holds a 25.5% stake, as does Statoil. The rest is divided between Azeri state oil company SOCAR, Russia’s LUKoil, Iran’s NICO, Norway’s Total and Turkey’s TPAO.

As far as the southern option is concerned, the Shah Deniz consortium picked TAP, ending discussions with ITGI. TAP will be negotiating exclusively to transit the gas from the Caspian to Italy. The next decision concerns the northern option and will be between Nabucco and SEEP, which is partially supported by BP. Odone said that a decision between Nabucco and SEEP will be made “in the next few months. I would say mid-summerish”.

It will then ultimately come down to a decision between TAP and whichever pipeline is chosen for the northern route, depending on the final market: Italy or Baumgarten in Austria. Odone said that it is unlikely that Shah Deniz would go with both the southern and northern routes. “The way things are at the moment, they are all competing with each other, so I don’t see how that could be. I don’t think so,” the BP-spokesman said.

Following the latest developments in the Southern Gas Corridor pipeline competition, TAP Managing Director Kjetil Tungland said in an e-mailed statement on 20 February that “we are pleased to confirm that TAP has been selected by Shah Deniz as the pipeline route to Italy. We will now enter into exclusive negotiations with them on progressing the project. We look forward to progressing the TAP project together with the Shah Deniz Consortium and the Italian, Albanian and Greek governments,” Tungland said.

TAP firmly believes that it remains a strong contender to win the bid to transport Shah Deniz II gas to Europe. “We are also confident that the TAP route to Italy offers the Shah Deniz consortium the most attractive market and the most advanced evacuation route. No further comment,” he added.

As far as debt-stricken Greece and the Southern Corridor are concerned, this is good news for Athens because it confirms international investor confidence in the Mediterranean country and confirms TAP and Greek route as a strong option in the Southern Corridor, Rikard Scoufias, Country Manager TAP, Greece, said in an emailed statement.

“We are obviously pleased with the decision by Shah Deniz. It is a win for Greece and confirms TAP and the Greek Route as a strong option in the Southern Gas Corridor. As I have said many times, our commitment to Greece stands firm and I believe this also sends a positive signal of international investor confidence in the country,” Scoufias said, adding that TAP will now continue co-operation with the government and the Greek authorities.

TAP aims to become operational in 2017 and would carry 10bn cubic metres of Caspian gas a year and be scalable to a maximum capacity of 20bn cubic metres. TAP’s partners are Norway’s Statoil, Swiss EGL and Germany’s E.ON Ruhrgas.

Meanwhile, Nabucco is reportedly proceeding with a smaller more flexible route. Odone told New Europe that Nabucco has “revised their offer to basically make the route start from the Turkish-Bulgarian border and go up to Austria.”

A spokesman for the Nabucco consortium said in an emailed statement on 17 February that it is “currently calculating different scenarios in order to find the best solution for suppliers and transportation customers. The Nabucco concept, whereby the pipeline travels from the eastern borders of Turkey to Baumgarten in Austria, continues to be our preferred option as it is a comprehensive solution for all parties involved.

Negotiations between our shareholders and the Shah Deniz consortium are ongoing”. Nabucco was initially set to carry up to 31bn cubic metres of natural gas per year from the Caspian region and the Middle East to Europe. The construction of the 4,000-kilometre pipeline was set to start in 2013 and the first gas is to flow in 2017. The Vienna-based consortium’s main shareholders are Austrian energy company OMV, German utility RWE, Hungary’s MOL, Romania’s Transgaz, Bulgaria’s Bulgargaz and Turkey’s Botas.

But Turkey reportedly will no longer lend full support to Nabucco and will shift its priority to its own Azerbaijan-Turkey project, the Trans-Anatolia Gas Pipeline (TAGP; Turkish acronym TANAP).
Meanwhile, an industry source, talking on condition of anonymity, told New Europe that the decision to eliminate ITGI shows “that Nabucco is not dead. It’s not going to be the behemoth, the giant that has been going on for so long, but Brussels is still strongly pushing for Nabucco. There are a lot of politicians who have invested a lot of political capital in Nabucco and it’s very, very hard for them to let go. And they won’t let go easily, just as the Italians and the Greeks didn’t want to let go of ITGI.”

The ITGI would have been an upgrade and extension of existing gas connections between Turkey and Greece. Italy’s Edison, Greece’s government-controlled DEPA and Turkey’s Botas are among ITGI’s partners.

On 20 February, Greece and Italy reminded that the two countries have signed an inter-governmental agreement, noting that ITGI is better than its rivals, despite an announcement it has been excluded. In a joint statement the Greece’s Energy, Environment and Climate Change Ministry and Italy’s Industry Ministry reiterated their support for ITGI.

Following “recent reports of the state of developments on the negotiations” on the matter, the ministries said ITGI is more “advanced and mature,” and that it can greatly contribute to opening a gas route in the southern part of the EU.

Share on Facebook
Share on Twitter
Share on Google+
Share on LinkedIn
New Europe