Nabucco provides better supply competition on EU market

Oil&Gas Materials 5 December 2011 18:10 (UTC +04:00)

Azerbaijan, Baku, Dec. 5 /Trend A.Badalova/

Nabucco gas pipeline is a strategic project in terms of providing better supply competition on the EU market, while other Southern Corridor projects (ITGI and Trans Adriatic Pipeline) present an economically plausible approach, the Head of the research group "Global Issues" in German Institute for International and Security Affairs Friedemann Müller believes.

"Nabucco is a strategic project of the EU in order to provide a better supply competition on the worldwide largest natural gas import market, which is the EU," Müller told Trend via e-mail.

Nabucco along with ITGI and Trans Adriatic Pipeline (TAP) is the project within the Southern gas Corridor, which aim at transporting Azerbaijani gas to the European countries.

Nabucco gas pipeline project with the length of 3,900 kilometers and a maximum capacity of 31 billion cubic meters per year is designed to deliver gas from the Caspian region and Middle East to the EU countries. Nabucco project is planned to start construction in 2013 and the first supplies will be commissioned in 2017. The project's partners include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and the German RWE.

"Nabucco's capacity is designed to transport more than gas from Azerbaijan, possibly from Turkmenistan, possibly gas from Iraq, and in the long run possibly from Iran, Müller said. The South Caspian region down to the Persina Gulf has more gas reserves than Russia."

Insofar it makes a lot sense to build a transportation line from there to the worldwide largest market, the expert believes.

According to Müller, TAP and ITGI are designed to transport the concrete natural gas being available in 2017 from Azerbaijani Shah Deniz gas condensate field. "This is an economically plausible approach but not a strategic one," Müller said.

Gas, which will be produced during the second stage of Azerbaijani Shah Deniz gas condensate field development, is regarded as the main source for all three pipeline projects within the Southern gas Corridor.

Müller believes that the main challenge for these projects is to convince the government of Azerbaijan and the Shah Deniz consortium to understand the European strategic interests.

On Oct. 1, Nabucco, TAP and ITGI submitted their final proposals to the Azerbaijani side, which review them in accordance with previously announced criteria. The decision on the preferable transportation route is expected in the nearest future.

TAP is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe. TAP's initial pipeline capacity will be 10 billion cubic meters per year, while it has full scalability to 20 bcm. TAP's shareholders are EGL of Switzerland, Norway's Statoil and E.ON Ruhrgas of Germany.

ITGI project involves gas supplies from the Caspian region and the Middle East to the EU countries. It includes updated Turkish pipeline infrastructure and the Turkey-Greece junction pipeline and IGI. Its planned capacity is 11.8 billion cubic meters per year.