Nabucco pick hikes Turkey’s energy hub bid

ISTANBUL - Hürriyet Daily News

Nabucco stays one of two firms along with the Trans-Adriatic Pipeline in the running to carry Caspian gas to the EU. Hürriyet photo

The Shah Deniz consortium, led by BP and the Azerbaijani state-run energy company Statoil, has concluded its evaluation of potential gas export routes towards Southeast and Central Europe, and has chosen to back a new version of the Nabucco project.

With the decision, Nabucco remains one of two companies – along with the Trans-Adriatic Pipeline (TAP) – in the running to carry Caspian gas to Europe. This contributes to Turkey’s goal of becoming an energy hub, as both of these projects are likely to start from Turkey.

“The Nabucco West project, with a route running from the Turkish-Bulgarian border to Baumgarten, has been selected as the single pipeline option for the potential export of Shah Deniz Stage 2 gas to Central Europe,” the consortium said in a press release yesterday. “We are delighted to announce the selection of the Nabucco West option, alongside our earlier selection of TAP. This represents another important milestone in the development of Shah Deniz Stage 2 and the transportation of gas resources from the Caspian to Europe. We are grateful to the governments and companies who have supported the development of both the Nabucco West and SEEP pipeline projects,” Rashid Javanshir, president of BP’s Azerbaijan, Georgia and Turkey Region, said in the statement.

The move came only two days after an inter-governmental agreement was reached between Turkey and Azerbaijan, providing a vital connection in the form of the $7 billion Trans-Anatolian natural gas pipeline project (TANAP), which is planned to carry Azeri natural gas across Turkey to the edge of Europe.

The decision is part of a long elimination process in which rival schemes are vying to ship Caspian gas, which the European Union hopes will break Russia’s market dominance. In February TAP was selected as a possible southern route, beating off competition from rival ITGI.

“The Shah Deniz consortium will continue to work with the owners of the two selected pipeline options,” yesterday’s statement said. Shah Deniz will make a final decision between these projects and conclude the related gas sales agreements ahead of its final investment decision, planned for mid-2013.

“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,” the consortium said.