Azeris deal fresh blow on Nabucco

Azeris deal fresh blow on Nabucco

Azeris deal fresh blow on Nabucco

The consortium did not choose Nabucco West to transport Azeri gas to Europe, citing higher gas prices in Italy and Greece as justification, OMV said.

Nabucco West has lost the tender process to channel natural gas from the Caspian Sea to central Europe, Austrian oil and gas producer OMV, the leader of the Nabucco West project, announced yesterday in a press statement.

“The Nabucco West project was not selected by the [Shah Deniz II] consortium,” OMV stated on June 25.

The consortium that chose the Trans Adriatic Pipeline (TAP) project over Nabucco West to transport Azeri gas to Europe cited higher gas prices in Italy and Greece as justification, OMV said later. "The Nabucco project is over for us,” OMV Chief Executive Gerhard Roiss told a hastily called news conference, putting to rest the suggestion that Nabucco could also be built eventually.

Roiss questioned whether higher gas prices could really be achieved in austerity-plagued Greece or plentifully supplied Italy, which lie on the TAP route. “The question of whether that is a fig leaf for a political decision I leave to you to judge,” he said.

The operators of the Shah Deniz field – BP, Statoil , Azeri state energy firm SOCAR, Total and others – had been expected to announce whether they had chosen the Trans-Adriatic-Pipeline (TAP) or the Nabucco West to carry the gas to Europe.

The Nabucco West project was planned to start at the Turkish-Bulgarian border, traversing Bulgaria, Romania and Hungary and ending at the Central European gas hub, Baumgarten, in Austria. The Nabucco consortium’s members are Austria’s OMV, Hungary’s MOL Turkey’s Botaş, Bulgaria’s BEH and Romania’s Transgaz while the TAP’s members are Switzerland’s AXPO Holding, Statoil and Germany’s E.ON Ruhrgas.

Azeri gas via TANAP, TAP to Europe?

With the decision of the consortium not to choose Nabucco West to supply gas, an important step for the TANAP pipeline has also been taken. TANAP will bring the gas from Azerbaijan to the European edge of Turkey, and was planned to connect with either Nabucco or TAP.

Turkish Energy Ministry officials did not make any comment about the issue to the Hürriyet Daily News without seeing the final written decision of the consortium.

Turkey and Azerbaijan have reached an agreement on building the Trans-Anatolian gas pipeline by June 2012. Turkey has a 20 percent stake in TANAP, while Azerbaijan’s state oil company SOCAR holds 80 percent.

Construction of the TANAP pipeline, which will be built from the Turkish-Georgian border to Turkey’s border with Europe, is expected to start at the end of 2013 and the project’s first phase is seen ready at the end of 2017.