Gerhard Roiss, OMV's CEO, would not rule out the possibility of Nabucco and TAP teaming up. (Nabucco)
[private]A joint venture between Nabucco and Trans-Atlantic Pipeline (TAP) – two competing pipeline projects that aims to bring Caspian gas to Europe by 2017 – cannot be ruled out and talks between the two consortiums have taken place, the CEO of Austrian oil and gas company OMV said on Thursday.
Speaking to reporters in Istanbul, Gerhard Roiss 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 billion cubic metres per year 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. The plan is, as a first step, to secure gas from the second development of the BP-operated, 16 bcm/y Shah-Deniz field, and bring in gas from Turkmenistan and Iraq at a later stage. On 1 October, TAP and Nabucco – along with the Edison-backed Italy-Turkey-Greece Interconnector (ITGI) project – will submit proposals to carry gas from the Shah-Deniz.
However, Statoil – which holds a 25.5% in Shah-Deniz – is also a partner in the TAP project, hence it is plausible that TAP will at least secure some of the gas from the field. This would lead Nabucco short of gas as it is uncertain when – or if – the pipeline will get access to Turkmen and Iraqi supplies. However, Roiss said he was confident the EU27 and Turkey – which according to OMV needs 150 bcm/y of additional gas imports until 2020 – would need more gas than the rival TAP pipeline could offer.
“Europe needs a 31 bcm/y pipeline, not a 10 bcm/y pipeline. The issue is which gas is available and when. Iraqi gas will come but I don’t know when,” he said. He added that Nabucco could take available, spare gas from the Shah-Deniz 1 development as well as from take or pay contracts exceeding Turkey’s needs.
Still, filling a 31 bcm/y pipeline with gas by 2017 seems like a mountainous challenge unless a deal with Statoil and the other TAP partners - Germany’s E.On Ruhrgas and Swiss-based EGL - is reached.
Although Turkmen gas is a real prospect, this would rely on building a gas pipeline through the Caspian Sea to Azerbajan. This would be a politically sensitive issue due to disputes with neighbouring countries – such as Iran - about rights to the hydrocarbons in the area.
The European Commission nevertheless wants to support the construction of a gas pipeline between Turkmenistan and Azerbaijan in order to diversify supplies away from Russia.
The EC said earlier this month that it had secured a mandate to begin talks with government officials from Turkmenistan and Azerbaijan about building the pipeline.
This nevertheless seems like a huge challenge.
“It is a difficult task for the EU to negotiate with the governments in Azerbaijan and Turkmenistan without settling the legal issue of the Caspian Sea. And Russia and Iran don’t seem to be in a hurry to resolve the issue,” Simon Pirani, a senior research fellow with the Oxford Institute for Energy Studies, told Interfax on 12 September.
According to Pirani, increasing gas sales to China will likely reduce Turkmenistan’s interest in exporting gas to Europe anyway. Turkmenistan started to sell gas to China earlier this year through the eastern section of China’s second West-East pipeline, which runs to Guangzhou. The pipeline, which is the world’s longest, came on-stream on 30 June after Turkmenistan agreed to supply Beijing with up to 40 bcm/y, about half its annual production. It is the second link between the two countries and is expected to deliver 30 bcm/y to China in 2012.
Turkmenistan has abundant gas resources – 8 trillion cubic metres of proved gas reserves, according to BP’s Statistical Review of World Energy 2011. It produced just over 42 bcm in 2010. Moreover, the South Yolotan field is estimated to be the world’s second-largest gas field in terms of gas-in-place.[/private]
Nabucco-TAP merger possible, OMV chief says
Gerhard Roiss, OMV's CEO, would not rule out the possibility of Nabucco and TAP teaming up. (Nabucco)
Speaking to reporters in Istanbul, Gerhard Roiss 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 billion cubic metres per year 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. The plan is, as a first step, to secure gas from the second development of the BP-operated, 16 bcm/y Shah-Deniz field, and bring in gas from Turkmenistan and Iraq at a later stage. On 1 October, TAP and Nabucco – along with the Edison-backed Italy-Turkey-Greece Interconnector (ITGI) project – will submit proposals to carry gas from the Shah-Deniz.
However, Statoil – which holds a 25.5% in Shah-Deniz – is also a partner in the TAP project, hence it is plausible that TAP will at least secure some of the gas from the field. This would lead Nabucco short of gas as it is uncertain when – or if – the pipeline will get access to Turkmen and Iraqi supplies. However, Roiss said he was confident the EU27 and Turkey – which according to OMV needs 150 bcm/y of additional gas imports until 2020 – would need more gas than the rival TAP pipeline could offer.
“Europe needs a 31 bcm/y pipeline, not a 10 bcm/y pipeline. The issue is which gas is available and when. Iraqi gas will come but I don’t know when,” he said. He added that Nabucco could take available, spare gas from the Shah-Deniz 1 development as well as from take or pay contracts exceeding Turkey’s needs.
Still, filling a 31 bcm/y pipeline with gas by 2017 seems like a mountainous challenge unless a deal with Statoil and the other TAP partners - Germany’s E.On Ruhrgas and Swiss-based EGL - is reached.
Although Turkmen gas is a real prospect, this would rely on building a gas pipeline through the Caspian Sea to Azerbajan. This would be a politically sensitive issue due to disputes with neighbouring countries – such as Iran - about rights to the hydrocarbons in the area.
The European Commission nevertheless wants to support the construction of a gas pipeline between Turkmenistan and Azerbaijan in order to diversify supplies away from Russia.
The EC said earlier this month that it had secured a mandate to begin talks with government officials from Turkmenistan and Azerbaijan about building the pipeline.
This nevertheless seems like a huge challenge.
“It is a difficult task for the EU to negotiate with the governments in Azerbaijan and Turkmenistan without settling the legal issue of the Caspian Sea. And Russia and Iran don’t seem to be in a hurry to resolve the issue,” Simon Pirani, a senior research fellow with the Oxford Institute for Energy Studies, told Interfax on 12 September.
According to Pirani, increasing gas sales to China will likely reduce Turkmenistan’s interest in exporting gas to Europe anyway. Turkmenistan started to sell gas to China earlier this year through the eastern section of China’s second West-East pipeline, which runs to Guangzhou. The pipeline, which is the world’s longest, came on-stream on 30 June after Turkmenistan agreed to supply Beijing with up to 40 bcm/y, about half its annual production. It is the second link between the two countries and is expected to deliver 30 bcm/y to China in 2012.
Turkmenistan has abundant gas resources – 8 trillion cubic metres of proved gas reserves, according to BP’s Statistical Review of World Energy 2011. It produced just over 42 bcm in 2010. Moreover, the South Yolotan field is estimated to be the world’s second-largest gas field in terms of gas-in-place.[/private]