Western expert: Situation with Nabucco to be clarified by late 2010
Azerbaijan, Baku, July 28 / Trend A. Badalova /
The situation with Nabucco gas pipeline aimed at transporting gas from the Caspian region and the Middle East to the EU countries will be clarified by late 2010 after the completion of the "open season", Editor-in-chief at Eurasia Energy Observer, Andrej Tibold, told Trend via e-mail.
"More about Nabucco's viability will be known after the 'open season' closes, somewhere by the end of the year, when shippers can book capacity in the pipeline. The success or failure of this will be symbolic for the progress Nabucco is making," he said.
The process of "open season" includes sale of Nabucco gas pipeline's capacity. It includes a preparatory phase and the phase of execution. The preparatory phase of the process has already begun. The phase will be implemented in 2010. This phase includes a separate phase for making bids to order capacity of the pipeline by project shareholders and the phase for making bids by all shippers (including shareholders and third parties). Shareholders of the project will receive up to 15 billion cubic meters of gas per year (50 percent of the total transport capacity of the pipeline), the remaining 50 percent will be offered to third parties on the equal terms on the principle of transparency. In this procedure, all market participants will be able to sign long-term contracts.
"Nabucco" project official representative Christian Dolezal told Trend that transport capacities will be ordered in the process of "open season", agreements on transportation will be signed.
The Nabucco gas pipeline project worth 7.9 billion euro envisages gas supplies from the Caspian region to EU countries.
Construction is planned to launch in 2011, with first supplies being commissioned in 2014.
Azerbaijan and Iraq are considered main suppliers of gas in the first phase of the project.
It is planned to get 8-10 and 8 billion cubic meters from them respectively.
There is a lot of talk on Nabucco lately and concentrates mostly on the fact that the Nabucco consortium has not been able to close any supply contract yet, Tibold said.
Since Azerbaijan (SOCAR) for now remains the key supplier to Nabucco, it will also try to get the best possible price for its gas, from alternatives like TAP and ITGI or possibly even export as CNG across the Black Sea, he said.
It will therefore wait until the last moment as to negotiate the most favorable deal for itself, before it signs a binding supply contract, Tibold said.
After that, thinks might start to move a lot faster and other Caspian countries might follow more quickly, he said.
At present, the main factor restraining Azerbaijan from signing a contract for gas supply with Nabucco shareholders is the lack of a final investment decision.
SOCAR representative told Trend that as soon as an investment proposal on the Nabucco, TAP or ITGI is accepted, Azerbaijan will start negotiations with the shareholders of these projects.
Nabucco participants are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE. Each has an equal 16.67-percent share.