GDF Suez may bring extra gas to Nabucco

GDF Suez may bring extra gas to Nabucco

Azerbaijan, Baku, Nov. 9 / Trend , A.Badalova/

By joining the Nabucco gas pipeline, French GDF Suez would become the seventh shareholder and significantly increase the chances of implementing the project. France's desire to join the shareholders was stated recently by GDF Suez President Gerard Mestrallet.

The company was not able to join the project in 2008. Turkey vetoed its participation in Nabucco due to their contrasting views on the so-called "Armenian Genocide" and France's position on Turkey joining the EU. Today Turkey is interested in the French company's participation in the project, which is testified by Turkish Foreign Minister Ahmet Davudoglu's statement recently about Ankara's positive approach to GDF Suez's participation in Nabucco.

A point of debate in the Nabucco project has long been the issue of filling the pipeline, with many experts debating which countries could guarantee such large volumes of energy. Only Azerbaijan and Iraq are considered viable, potential gas suppliers. Turkmenistan's participation is still controversial. Meanwhile, Iran's future participation in Nabucco is still dubious due to disagreements with the EU and U.S. on Tehran's nuclear program.

It should be noted, though, that Nabucco shareholders are pushing hard to find real suppliers for the project. In May Austria's OMV - the operator of the project - and Hungary's MOL acquired 20-percent equity participation in the development of gas fields in northern Iraq to supply fuel to Europe. In September Iraq and Turkey discussed signing a memorandum of understanding to deliver Iraqi gas to European consumers via the Nabucco pipeline. In April Turkmenistan and the German group RWE signed a memorandum providing for long-term cooperation in the development of the Turkmen shelf of the Caspian Sea.

GDF Suez's joining Nabucco as the seventh shareholder could bring significant benefits. The company today participates in the development of the Absheron offshore field in Azerbaijan, which has immense gas reserves, according to geologists.

GDF Suez joined the project in the summer and owns a 20-percent stake. Other participants include the the State Oil Company of the Azerbaijan Republic (SOCAR) and French Total. According to SOCAR's forecasts, gas reserves at the Absheron field are 300 billion cubic meters. Within three years, one exploratory well worth $100 million will be drilled in the block. In the future, two more exploration wells will be drilled.

Thus, the gas produced at this field together with the gas obtained during the second phase of the Shah-Deniz field may be an additional resource base for the Nabucco project.

Nabucco shareholders lauded GDF Suez's possible participation in the project. A Nabucco official earlier told Trend that the consortium is positive about the company's interest.

"The consortium has always stressed that it will be open for a seventh partner if it brings additional value to the project," he said. Nevertheless, the source noted that talks on any company's participation are not being held at the moment.

Although the Nabucco project does not envisage the pipeline passing through French territory, the country could also benefit from participating in the project. According to Institute of National Energy head Sergey Pravosudov, GDF Suez's participation in Nabucco will allow France to strengthen its position in global energy policy.

"French participation in all transit projects will enable Paris to control not only gas supply to Europe, but also address other issues of energy security," Kommersant quoted the expert as saying.

The Nabucco project worth 7.9 billion euro will deliver Azerbaijani and Central Asian gas to the EU by 2014. The pipeline's construction is expected to begin 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.

The Nabucco Gas Pipeline International will invest 30 percent of the project on the basis of its share.

The remaining 70 percent will be provided by international institutions.

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