Azerbaijani gas producers will soon choose between two competing European pipeline routes, making their choice based upon which of the planned projects promises quicker returns, Azerbaijan's Energy Minister Natig Aliyev said Monday in Vienna, dpa reported.
The consortium developing the Shah Deniz II offshore gas field are expected to announce by the end of June whether they will ship their gas through the Nabucco pipeline, running through the Balkans to Austria, or through the Trans Adriatic Pipeline (TAP) via Greece and Italy.
As British energy group BP, Norway's Statoil, Azerbaijan's Socar and the other Shah Deniz partners had already seen production delayed from 2012 to as late as 2018, one key factor would now be which route is cheaper to build, Aliyev said, referring to consortium's plans to invest in the preferred pipeline project.
"Now, the main factor for partners is the commercial factor in the short term," he said. "They have to (get) return on their investment as quickly as possible."
The pipeline that wins the Azerbaijani bid is expected to progress, while the other one will likely never be realized.
However, Aliyev stressed that the Shah Deniz group would also consider long-term questions such as which route promises a bigger customer base.
The TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to the south of Italy, and further to Western Europe. TAP's initial pipeline capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters per year. TAP's shareholders are Switzerland's AXPO (42.5 percent), Norway's Statoil (42.5 percent) and Germany's E.ON Ruhrgas (15 percent).