It’s early to bury Nabucco
Azerbaijan, Baku, Oct. 16 / Trend /
Recent events around the "Southern Gas Corridor" project gave some grounds for media comments such as Nabucco, being one of three projects for the future gas corridor, cab be buried as an option.
In fact, Chief Executive of Nabucco shareholder OMV Gerhard Roiss said first gas supplies would flow through Nabucco in 2018 and that this "was the latest information which we have." Following this, on Oct.13 EU Commissioner Gunther Oettinger stated about the increased cost of the project - from 10 to 14 billion euros instead of the previously estimated 7.9 billion.
One can agree that such messages are not encouraging at a time when Azerbaijan studies and analyzes proposals on projects, including Nabucco, to transport its gas to Europe.
Earlier, on Oct. 3, Iraq, being one of the expected key suppliers to Nabucco, expressed its attitude to the project.
"It is too early to speak about Iraqi gas supplies to Nabucco, as the country's gas production has not reached the desired level to export it abroad," Official representative of the Iraqi Oil Ministry Asim Jihad said.
Speaking at the meeting of the Security Council on Oct.14, Russian President Dmitry Medvedev once again outlined Russia's position over the construction of the Trans-Caspian gas pipeline, which is part of the Nabucco project. He said "it is quite a complex issue which, of course, is directly dependent on the Caspian Sea status and requires the coordination of positions of all member states of the Caspian summit."
Thus, the negative psychological background was created for the choice in favor of the Nabucco project.
However, Nabucco Gas Pipeline International GmbH stated that it does not plan to make any changes in the terms of the project realization.
"There are no changes planned. We together with our shareholders have always stated that we are aligning our efforts with the gas sources and now we are waiting for the decision of the Shah Deniz Consortium," Nabucco project official representative Christian Dolezal said on Oct.12.
Dolezal said the pipeline is to be ready for the period when the gas will be available for export.
"We want to start construction in late 2013 and we want to be finalize our works in late 2017, so that everything is in place when the gas is ready for export," he said.
Nabucco gas pipeline project's cost is currently under review, Dolezal added. "The CAPEX figure of the project is 7.9 billion euro and the figure is currently under review," he said. Dolezal nioted that the investment costs of 7.9 billion euro are based on the feasibility study. The exact cost of the project will be set after the completion of the detailed engineering.
Early this year Managing Director of Nabucco Gas Pipeline International Reinhard Mitschek said that the estimated costs of the pipeline are likely to be revised upwards to reflect the increased length. Another factor which would lead to change in the project's cost can be commodity price dynamics.
Another positive message came from Munich. Germany 's Bayerngas GmbH has started negotiations with the Nabucco consortium on joining the project.
"We have just started the negotiations to be the seventh shareholder in the Nabucco project," Spokesman for the Munich-based Bayerngas Dirk Barz told Trend on Oct.10. "We hope that they will be successful." Reinhard Mitschek said the intention of the German company is a great step forward for Nabucco.
Austrian President Heinz Fischer's official visit to Baku and Ashgabat was another event in support of the Nabucco project.
During a press conference in Baku, President Fischer has stated "... in this project [ Nabucco ], we see the expression of important interests and positions, as the European Union and Austria .... While talking to you, we again convinced of that Azerbaijan attaches great importance to these relations. We consider your thoughts about this as very important and we want to rightly interpret them. "
Answering journalists' questions, he said 'the Austrians and Europeans, I believe, hold a special, good position towards the Nabucco project. "We show a special interest in this project. It is especially good for Austria, as the project leads directly to Austria. We have the opportunity to go to other consumers. We are surrounded by 100 million Europeans and they have the opportunity to use this gas. This is Germany, Slovenia, Czech Republic, Croatia, Slovakia - our neighbors. This will be provided not only for our neighbors, but also for the whole Europe. I think that this project is important for Azerbaijan. It is important for us to ensure confidence in the planning," he noted.
"This should be such a decision that we did not lose time, and that Azerbaijan could maximum export its gas resources. We are in talks to combine these two components. I repeat that we must take this decision together," President Ilham Aliyev stated.
"We are interested in maximizing the sales of our gas potential. Today, the Shah Deniz project is in foreground as our major gas project. But at the same time, the recently opened Umid field of SOCAR also gives very high expectations. The Absheron field recently opened by Total and Gaz de France also has large gas reserves. I can say that Azerbaijan's proven gas reserves increased by about 600 billion cubic meters over the past year," Aliyev added.
This, apparently, will become a crucial factor for Azerbaijan in the selection of the project. Only Nabucco can allow Azerbaijan to maximum export its gas reserves. As for timing, the chances are the same for all projects: any of the selected pipelines could be commissioned only in 2017, when the first gas from the Shah-Deniz-2 project will be produced.
The South Corridor is a priority EU energy project diversifying energy supply routes and sources and increasing EU energy security. The Southern Corridor includes the Nabucco gas pipeline, Trans Adriatic Pipeline (TAP), White Stream, and ITGI (Turkey-Greece-Italy pipeline).
The contract to develop the offshore Shah Deniz field was signed June 4, 1996. Participants in the agreement are: BP (operator) - 25.5 percent, Statoil Hydro - 25.5 percent, NICO - 10 percent, Total - 10 percent, LukAgip - 10 percent, TPAO - 9 percent, SOCAR-10 percent.
Nabucco gas pipeline project is designed to supply gas from the Caspian region and Middle East to the EU. Participants of the project are Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE companies. Each of participants has equal share to the amount of 16.67 percent. Construction of gas pipeline is planned to be launched in 2013, the first supplies - in 2017. Maximal capacity of the pipeline will hit 31 billion cubic meters per year.