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Azeri consortium opts for TAP over Nabucco pipeline

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(Globalpost/GlobalPost)

The consortium developing an immense new Azeri gas field, part of European efforts to reduce dependence on Russia, said on Friday it had chosen the shorter, cheaper Trans-Adriatic Pipeline (TAP) over the rival Nabucco project.

"Azerbaijan's first gas to Europe will be exported via Trans-Adriatic Pipeline" Gordon Birrell, BP's regional director told journalists in Baku, speaking on behalf of the consortium.

The Shah Deniz II consortium comprises Britain's BP, Azerbaijan's SOCAR, Norway's Statoil and France's Total.

The group aims to extract 16 billion cubic metres (560 billion cubic feet) of gas per year from under the Caspian Sea. Six billion cubic metres will go to Turkey from 2018 and the rest will go to Europe from 2019, BP says.

Friday's announcement in favour of TAP means that from Turkey the gas will flow through Greece and Albania and then under the Adriatic Sea to the heel of south-eastern Italy.

The Nabucco route had planned to transport it from the Turkish-Bulgarian border to Bulgaria, Romania, Hungary and Austria -- a longer and more expensive 1,300-kilometre (810-mile) route, although unlike TAP, it was entirely overland.

The group behind the Nabucco project includes Austrian firm OMV, Hungarian company MOL, Romania's Transgaz, Bulagargas from Bulgaria, Turkey's Botas and French firm GDF Suez.

It said that despite Friday's rejection it would seek to develop opportunities "based on alternative gas sources".

The consortium said in a statement: "The need for diversification remains a challenge for the European market, in particular in the countries of Central and South Eastern Europe. We remain convinced that the NABUCCO route offers the only possibility to answer these needs."

Either route is intended to achieve the aim -- supported by Washington -- of reducing Europe's dependence on gas from Russia.

Moscow meanwhile backs a new pipeline under construction known as South Stream that aims to transport 63 billion cubic metres under the Black Sea to Europe.

It also completed in 2011 the first part of a new pipeline across to Baltic from Russia to northern Germany called Nord Stream.

Europe's annual demand for additional gas import may reach 80 billion cubic meters by 2020 and surpass 140 billion cubic meters by 2030, according to the South Stream website.

Russia meanwhile has moved to diversify its customer base by looking east to clients in Asia, most notably gas and oil-hungry China.

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http://www.globalpost.com/dispatch/news/afp/130628/azeri-consortium-opts-tap-over-nabucco-pipeline