RWE: Nabucco gives start to new gas projects in Iraq, Turkmenistan

Oil&Gas Materials 30 June 2010 16:14 (UTC +04:00)

Azerbaijan, Baku, June 30 / Trend A.Badalova /

Compared to other Southern Corridor projects, the Nabucco pipeline project enhances Europe's energy security and competitive gas prices, the German RWE energy group reported. The company is a Nabucco shareholder. 

Based on the company's Nabucco report, the Greece-Italy Pipeline (IGI) and the Trans Adriatic Pipeline (TAP) are flawed in that they mainly focus on the Italian market, which, according to the RWE, is already supersaturated with gas.

Referring to the Nabucco project, the RWE said the pipeline is the only project that will provide significant access to gas for "interested third parties. The project's shareholders will receive up to 15 billion cubic meters of gas per year, while the remaining 50 percent will be offered to third parties during the so-called "open season."

Nabucco's other advantage is its independence from the interference of potential transit nations. The TAP and IGI projects depend on transportation via Turkey where the Botas company operates, which must invest a significant amount in expanding the shipping network.

The Nabucco project is worth 7.9 billion euro. Participants are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Botas and RWE. Each participant has an equal 16.67-percent share. The pipeline's construction will launch in 2011 with first supplies being sent in 2014. Its maximum capacity will hit 31 billion cubic meters per year. The Nabucco Gas Pipeline International will invest 30 percent of the project cost. Seventy percent will be paid by loans.

Based on the RWE report, Nabucco's capacity will allow new gas production projects to be initiated in northern Iraq and Turkmenistan. Meanwhile, IGI and TAP are too small to justify such large investments.

In addition, Nabucco will trigger investments in new infrastructure to develop the Trans Caspian gas pipeline project, which will link Turkmenistan with European markets.

The RWE believes that gas transit tariffs through Nabucco will also be lower - between 41 to 73 percent - than similar rates using IGI and TAP.

The Greece-Italy junction pipeline is a missing link of the Turkey-Greece-Italy transport corridor, which enables gas transports from the Caspian region and the Middle East to Italy and Western Europe via Turkey and Greece. The ITGI's designed carrying capacity is 12 billion cubic meters per year. ITGI is a South Corridor project, mainly involving the Caspian and Middle Eastern gas supplies to the EU.

The Trans-Adriatic pipeline, also a part of the South Corridor, is designed to transport gas from the Caspian region and the Middle East to Europe. The pipeline will begin in Greece and pass through Albania and the Adriatic Sea to Italy.

The gas pipeline includes a 115-kilometer-underwater section from Albania to Italy.