Southern Corridor Contest Moves Towards Decision
Competitors in the race to give life to the 'Southern gas corridor,' aimed at supplying Europe with non-Russian gas sources, have all lodged bids to obtain the 10 billion cubic meters per year which will be available from the offshore Shah Deniz II field in Azerbaijan.
The EU backed Nabucco pipeline project, the Trans-Adriatic Pipeline and Interconnector Turkey-Greece-Italy, all submitted offers to the State Oil Company of the Azerbaijan Republic (SOCAR) prior to deadline on Saturday (1 October).
Throwing a twist into the already muddled world of Caspian gas pipelines, BP plc., a key player in the Shah Deniz II gas field project, also unveiled a pipeline bid.
BP's proposed 800 mile link dubbed “South East Europe Pipeline” would travel across Turkey and run across Bulgaria and Romania to eastern Hungary, using existing infrastructure to link to Azerbaijan in the east and with the gas hub Austria in the west.
A decision on a route to bring gas from Azerbaijan to European markets is expected to be known by late 2011. Azeri gas is expected to be available for use in Europe from 2017.
Proposals would be reviewed according to commercial attractiveness, technical and financial feasibility, engineering and design work, management, coordination and transparency, and the possibility of phased scale-up of the project amid other criteria.
Rovnag Abdullayev, the president of Azerbaijan's state oil company SOCAR, reportedly said that Azerbaijan was considering all the options to transport its gas to Europe, including ITGI, TAP, Nabucco and White Stream.
However White Stream, a project supported by the former Ukrainian government to bring gas to Western Europe via Georgia, Ukraine and Romania or Bulgaria, appears to have lost political backing in the meantime.
Each of the competing consortiums presented their position as why there are the best alternative to move gas to Europe.
Reinhard Mitschek, Managing Director of Nabucco, “We’re convinced that Nabucco provides the best way of transportation for gas exports from Azerbaijan and other countries. He underlined that the project has political support and stability propped by a 50-year-long treaty signed by all five transit countries (Austria, Hungary, Romania, Bulgaria and Turkey), supported by bilateral project support agreements.
Harry Sachinis, Chairman and CEO of DEPA, the Gas Corporation of Greece, stated on behalf of ITGI, the Turkey-Greece-Italy Interconnector, that this project would be able to deliver Azeri gas to Europe in the shortest possible time and at the lowest cost.
"The ITGI system can be operational as early as 2013 – sooner than any other pipeline option - and is the only project that can meet the timeline demanded by the Shah Deniz II full field. The ITGI system is the most compelling in every respect,” Sachinis inisted.
In an exclusive interview for EurActiv, Sachinis said that the ITGI system was "the most technically advanced of the various projects".
"It is ready to go," he hammered out. For their part, the Trans Adriatic Pipeline TAP stated that this was "the shortest and most financially viable of the proposed options".
"It is scalable and provides an efficient and cost-effective means of realising the increasing volumes of gas from the Caspian – and further afield – as they become available," a statement read.
Clearly referring to Nabucco and to Poseidon, the offshore section of the ITGI pipeline, TAP Managing Director Kjetil Tungland said:
"[Our] project may not be named after a Verdi opera or the Greek god of the sea, but [our] team of professionals has enough sense of history to know just what is at stake. All we ask is for our project to be judged on its merits."
According to their statements, each of the three competitors Nabucco, ITGI and TAP hopes to obtain all of the 10 bcm per year from the Shah Deniz II consortium in Azerbaijan. But Azeri officials have hinted that Baku would not put all its eggs in one basket and could allocate the 10 bcm to more than one European bidder.
The Shah Deniz II stakeholders are BP (field operator - 25.5%), Statoil (25.5%), SOCAR (10%), Lukoil (10%), NICO (10%), Total (10%), and TPAO (9%).
Sources: includes EurActiv