Nabucco project determines Iraqi gas
Azerbaijan, Baku, Oct. 3 / Trend A.Badalova /
The Marketing Company Nabucco Gas Pipeline Int. expects to begin shipping the Iraqi gas through the Nabucco pipeline in the fourth quarter of 2014, the Energy Intelligence Group wrote with reference to the company's managing director, Reinhard Mitschek.
"We believe that we will start up in 2014 and that the gas will be ready from Iraq," Mitschek said.
The Nabucco project worth $7.9 billion euro will deliver Azerbaijani and Central Asian gas to the EU. Construction of the pipeline is expected to commence in 2011. Its maximum capacity will be 31 billion cubic meters per year. Nabucco shareholders are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE with 16.7 percent each.
Mitschek said the first Iraqi gas would probably come in the fourth quarter of 2014, with deliveries rising to 8 billion cubic meters in 2015, the first full year of supplies.
Earlier in May, Austrian OMV and Hungarian MOL, which are shareholders of the Nabucco project, purchased a total of 20 per cent of shares of Iraq's natural gas company Pearl Petroleum to increase gas production in northern Iraq. The cost of the projects amounts to $8 billion
The partners will invest $8 billion in the development of gas production and transportation in the northern Iraq to ensure the capacity to supply raw materials for export to Europe.
In addition, earlier in September Turkey and Iraq discussed the prospects of signing a memorandum of understanding on delivery of the Iraqi gas to the European consumers via the Nabucco pipeline.
According to BP, in early 2009, Iraq's proven gas reserves amounted to 3.17 trillion cubic meters and comprised 1.7 percent of the world's natural gas reserves.
Despite the Nabucco project participants' confidence, there are major obstacles in the way of transporting Iraqi natural gas to the European countries through the Nabucco pipeline. Given the instability in the region, prospects of the Iraqi gas supply to Europe look obscure. The central government of Baghdad regards all the contracts that have been signed with the Kurdistan Regional Government as illegitimate. In addition, earlier Baghdad stated that it would be ready to deliver its gas to the Nabucco pipeline, only after if its domestic demand in gas is fully covered.
According to the U.S. Energy Information Administration (EIA), from 1981 to 2006, Iraq's demand in gas was in the corridor of 0.5-3.2 billion cubic meters per year. The lowest demand was fixed in 1983 in the amount of 0.5 billion cubic meters and the greatest in 1996 in the amount of 3.2 billion cubic meters. In 2006, Iraq's gas consumption amounted to 1.8 billion cubic meters, which is less by 0.6 billion cubic meters than in 2005.
The full capacity of the Nabucco pipeline will amount to 31 billion cubic meters. Azerbaijan is among potential gas suppliers of the pipeline.
According to Mitchek, the company also relies on the Azerbaijani gas deliveries in the amount of 8 billion cubic meters under the second stage of the Shah-Deniz field development. Nabucco expects delivery in the volume of 16 billion cubic meters of gas from Azerbaijan and Iraq. This amount would be sufficient to implement the first phase of the project. Further, it is planned to involve the Turkmen gas to bring the pipeline's capacity to 31 billion cubic meters.
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