Merging Nabucco and South Stream would be the most economical option, but it would be difficult to realise from a political perspective. (Nord Stream)
Saturday marks the submission deadline for the four competing pipeline projects hoping to bring gas from the 16 billion cubic metres per year Shah-Deniz II field to Europe by 2017, but there appears to be no obvious candidate to win the transportation contract. The competing projects are Nabucco, the Transatlantic Adriatic Pipeline (TAP), the Italy-Turkey-Greece Interconnector (ITGI) and the BP-backed South East Europe Pipeline.
With a proposed capacity of 31 bcm/y, Nabucco is the most ambitious of the four projects, however sceptics doubt if there will be enough gas available in the Central Asian region to fill the pipeline. But one possibility would be to merge Nabucco with Gazprom’s South Stream project to fill a pipeline with both Caspian and Russian gas, said Matthias Heck, a Frankfurt-based analyst at Macquarie Capital. The South Stream project, which also is backed by EDF, Eni and Wintershall, aims to bring Russian gas to Austria and Europe by 2015 through the Black Sea, hence bypassing the Ukraine.
“Merging Nabucco and South Stream would be the most economical option, but it would be difficult to realise from a political perspective,” Heck told Interfax on Friday.
The BP-backed Shah-Deniz consortium will select the winning pipeline project by the end of the year. A spokesman for BP ruled out that more than one pipeline project would be selected however.
“There is not enough gas for more than one project,” BP spokesman Tony Odone told Interfax on Friday.
The second phase of Shah-Deniz is expected to come online in 2017 and by 2019 will be producing around 16 bcm/y – all of it destined for export, including 6 bcm/y earmarked for Turkey and 10 bcm/y for other European countries.
On Friday, the Nabucco consortium also announced that it was in negotiations with Munich-based gas company Bayerngas about the latter company taking a stake in the project.
“This comes as a surprise because Bayerngas has - until now - not been an importer of gas. It is mainly a regional gas wholesaler that procures gas directly from markets,” added Heck.
Nabucco is backed by Germany’s RWE, Austria’s OMV as well as Bulgarian Energy Holding (Bulgaria), Botas (Turkey), MOL (Hungary) and Transgaz (Romania). The plan is to bring in gas from Turkmenistan and Iraq to Europe at a later stage. However this is dependent on a subsea gas pipeline from Turkmenistan to Azerbaijan being built – a politically sensitive issue due to disputes with neighbouring countries, such as Iran and Russia, about rights to the hydrocarbons in the area. The European Commission, keen or reducing dependency on Russian gas, has nevertheless said it will soon begin talks with Turkmen and Azerbaijani officials about building the trans-Caspian pipeline.
Speaking to reporters in Istanbul earlier this month, Gerhard Roiss, CEO of OMV, said he was confident the Nabucco project would go ahead, but would not rule out the possibility of teaming up with its rival TAP. Talks with Statoil and the other stakeholders in 10 bcm/y TAP project were ongoing, he said.
“We are free to negotiate with anyone we want. Our team is talking to them [TAP]. Nabucco will come – I don’t care if we have to merge with some other project,” the CEO said.
The 31 bcm/y Nabucco pipeline will, according to plans, start at the Georgian/Turkish and the Iraqi/Turkish border, and end up in Baumgarten near Vienna, crossing Bulgaria, Romania and Hungary.
Deadline day for Shah-Deniz
Merging Nabucco and South Stream would be the most economical option, but it would be difficult to realise from a political perspective. (Nord Stream)
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Saturday marks the submission deadline for the four competing pipeline projects hoping to bring gas from the 16 billion cubic metres per year Shah-Deniz II field to Europe by 2017, but there appears to be no obvious candidate to win the transportation contract. The competing projects are Nabucco, the Transatlantic Adriatic Pipeline (TAP), the Italy-Turkey-Greece Interconnector (ITGI) and the BP-backed South East Europe Pipeline.
With a proposed capacity of 31 bcm/y, Nabucco is the most ambitious of the four projects, however sceptics doubt if there will be enough gas available in the Central Asian region to fill the pipeline. But one possibility would be to merge Nabucco with Gazprom’s South Stream project to fill a pipeline with both Caspian and Russian gas, said Matthias Heck, a Frankfurt-based analyst at Macquarie Capital. The South Stream project, which also is backed by EDF, Eni and Wintershall, aims to bring Russian gas to Austria and Europe by 2015 through the Black Sea, hence bypassing the Ukraine.
“Merging Nabucco and South Stream would be the most economical option, but it would be difficult to realise from a political perspective,” Heck told Interfax on Friday.
The BP-backed Shah-Deniz consortium will select the winning pipeline project by the end of the year. A spokesman for BP ruled out that more than one pipeline project would be selected however.
“There is not enough gas for more than one project,” BP spokesman Tony Odone told Interfax on Friday.
The second phase of Shah-Deniz is expected to come online in 2017 and by 2019 will be producing around 16 bcm/y – all of it destined for export, including 6 bcm/y earmarked for Turkey and 10 bcm/y for other European countries.
On Friday, the Nabucco consortium also announced that it was in negotiations with Munich-based gas company Bayerngas about the latter company taking a stake in the project.
“This comes as a surprise because Bayerngas has - until now - not been an importer of gas. It is mainly a regional gas wholesaler that procures gas directly from markets,” added Heck.
Nabucco is backed by Germany’s RWE, Austria’s OMV as well as Bulgarian Energy Holding (Bulgaria), Botas (Turkey), MOL (Hungary) and Transgaz (Romania). The plan is to bring in gas from Turkmenistan and Iraq to Europe at a later stage. However this is dependent on a subsea gas pipeline from Turkmenistan to Azerbaijan being built – a politically sensitive issue due to disputes with neighbouring countries, such as Iran and Russia, about rights to the hydrocarbons in the area. The European Commission, keen or reducing dependency on Russian gas, has nevertheless said it will soon begin talks with Turkmen and Azerbaijani officials about building the trans-Caspian pipeline.
Speaking to reporters in Istanbul earlier this month, Gerhard Roiss, CEO of OMV, said he was confident the Nabucco project would go ahead, but would not rule out the possibility of teaming up with its rival TAP. Talks with Statoil and the other stakeholders in 10 bcm/y TAP project were ongoing, he said.
“We are free to negotiate with anyone we want. Our team is talking to them [TAP]. Nabucco will come – I don’t care if we have to merge with some other project,” the CEO said.
The 31 bcm/y Nabucco pipeline will, according to plans, start at the Georgian/Turkish and the Iraqi/Turkish border, and end up in Baumgarten near Vienna, crossing Bulgaria, Romania and Hungary.