Cost of Constructing Trans-Caspian Gas Pipe Importantly Increased from Initial Assessments

Oil&Gas Materials 3 February 2007 15:35 (UTC +04:00)

The consortium of companies MottMcDonald Ltd (UK), Kantor Management Consultants (Greece), KLC Law Firm (Greece) and ASPI Consulting Engineers (Azerbaijan) developed initial feasibility study of possible ways for gas transportation from Turkmenistan to Europe via the territory of Azerbaijan under INOGATE project, Trend reports.

ASPI informed that possible transportation of gas via the Caspian Sea ground through pipeline is considered the priority route. Moreover, opportunities for gas transportation via Russia and Iran are also viewed.

An initial cost of the construction of subsea gas pipeline (at current prices for services and materials) is valued at $11.5bln. Its discharge capacity might constitute 22bln cu m a year.

In 1990s the budget of such project would be some $3bln.

Experts note that technical terms for construction of a pipeline are more efficient than the construction of blue fuel' (from Russian and Turkey via the Black Sea ground). It is explained with the shallow depth at the Caspian and more favorable nature environment as compared to the Black Sea.

The pipeline can be connected to the South Caucasus gas pipeline, which will transport gas from the Azerbaijani field Shah Deniz to Turkey by transit via Georgia. Further it is planned to transport this gas to Italy and other European countries via Greece and Italy.

At the end of January Greece and Italy signed a protocol on supporting the construction of the gas pipe which will provide an opportunity to transport the gas from Azerbaijan, Russia, countries of Near East and North Africa to Europe via Greece.

The experts of Azerbaijan note that the new gas pipe will give an opportunity to transport the gas from the Azerbaijani field Shah Deniz to Europe.

The Greek-Italian gas pipe will be connected to the Turkish-Greek gas pipe Komotin-Karajabey till June 2007. The construction of the Greek-Italian gas pipe Komotin-Otranto will begin in 2008 and complete in 2010.

The gross cost of the construction of the Greek-Italian gas pipe will exceed в'¬1 bln and partly the construction will be financed by the European Union.

INOGATE (Interstate Oil and Gas Transport to Europe) is an international co-operation program, which targets assistance to the regional integration system of oil and gas pipelines, as well as the implementation of oil and gas transportation via the said systems to CIS countries and in the direction of the European markets. The program acts as a stimulus to attract private investors and international financial organizations for the projects.

The countries which have signed the Frame Agreement are Azerbaijan, Albania, Armenia, Belarus, Bulgaria, Georgia, Greece, Kazakhstan, Kyrgyzstan, Latvia, Macedonia, Moldova, Romania, Serbia and Montenegro, Slovakia, Tajikistan, Turkmenistan, Turkey, Ukraine, Uzbekistan and Croatia.