TAP vs. Nabucco West confrontation may end amicablly

Analysis Materials 23 May 2013 18:23 (UTC +04:00)

Azerbaijan, Baku, May 23 / Trend /

Azer Ahmedbeyli, Trend analytical centre expert

In a month, the Shah Deniz consortium will make a final decision on an export route for transporting Azerbaijani gas to Europe. The gas production volumes from the second phase of the Shah Deniz field development stated by the consortium hit 16 billion cubic meters, of which only 10 billion are intended for Europe. So, today one has to choose one of two projects - the Trans Adriatic Pipeline (TAP) which follows a Greece-Albania-Italy route or Nabucco West via Bulgaria, Romania and Hungary to Austria, as this gas volume can fill only one pipe and there are no other real volumes today.

Both projects have undergone much and have done a lot to prove their commercial viability and strategic importance. Both projects are beneficial for Azerbaijan and the Shah Deniz consortium in terms of diversifying the supply routes. Both of them are also very important for Europe in terms of its energy security.

Experts and officials have repeatedly voiced their opinions about the possibility and expediency of choosing both projects. For example, Steve Garlick, BP Strategic Functioning Group manager, recently voiced this opinion in Athens.

Is it real to choose both projects a month before the final decision? Rather no than yes. However, theoretically, there are some chances. They appeared after the UN General Assembly unanimously adopted a resolution on the transit of energy resources initiated by Turkmen President Gurbanguly Berdimuhamedov in New York on May 17. It aims to promote international cooperation in ensuring the safe transportation of energy resources to international markets through pipelines and by using other supply systems. Some 71 UN member-states were co-authors of the resolution.

Turkmen Foreign Minister Rashid Meredov made a statement at a briefing on the UN adopted resolution. While answering journalists' questions about the prospects of Turkmen gas exports to Europe and the construction of the Trans-Caspian gas pipeline, he called the project as "rather real".

"At present, Turkmenistan, Azerbaijan and the EU are thoroughly working on the preparation of a tripartite document on main principles for gas supplies from the Caspian region to Europe," he stressed. "The reliability of supplies to Europe directly depends on our partnership scheme."

Azerbaijani Minister of Industry and Energy Natig Aliyev spoke about the preparation of such a document in early 2013. But the difference is that at present, Turkmenistan is publicly stating this. Earlier, it was not commenting on the issue.

Of course, there are great operations between the intentions and their practical implementation. It is necessary to implement great organizational and legislative work, namely, to attract foreign companies, to establish a consortium, to sign a dozen different contracts and inter-state agreements, to determine the obligations of the parties, to agree on prices, including transit and etc. to construct the Trans-Caspian pipeline and supply Turkmen gas to Europe. Nevertheless...

"Opening new gas pipelines for Azerbaijani gas will become more important for Europe's energy supply," U.S Ambassador to Azerbaijan Richard Morningstar told media in Baku today. "An initial 10 billion cubic meters of gas are very important as there will be more alternative resources for Europe in 2020."

He added that not only Azerbaijani gas will be used in the new projects.

"We hope that Turkmen gas will be also used," he said.

If a political document, which will include the specific guarantees of delivering its territory for the construction of the Trans-Caspian pipeline and Turkmen gas supplies to Europe in 2018-2019, is prepared before a final decision on an export route is made, an opportunity will appear to consider the phased implementation of both projects, respectively, in the short and medium term.