Turkey approves of scaled-down Nabucco West proposal

17 May 2012 14:23  [Source: ICIS news]

LONDON (ICIS)--The scaled-down Nabucco pipeline proposed by the consortium behind it should be a success by linking up with the Trans-Anatolian Pipeline (TANAP) to be built by Azerbaijan and Turkey, the Turkish energy and natural resources ministry said on Thursday.

With TANAP designed to transport gas from Azerbaijans Shah Deniz II field across Turkey, the Nabucco consortium has drawn up the modified Nabucco West proposal.

The 1,300km (806 miles) Nabucco West link would transport Shah Deniz II gas from the Bulgarian-Turkish border to the Central European Gas Hub in Baumgarten, Austria, and would be 68% shorter than the original 4,000km Nabucco proposal, which was designed to run all the way from Azerbaijan to the hub via Turkey.

Turkey aimed to conclude an agreement with Azerbaijan by the end of June for TANAP, while expecting Nabucco to move forward with its “doable”, alternative EU-backed Nabucco West proposal, said the Turkish ministry.

The Nabucco consortium, Nabucco Gas Pipeline International, had submitted its modified “competitive and comprehensive” proposal to the BP-led Shah Deniz II Consortium, said Reinhard Mitschek, managing director of the Nabucco consortium.

Mitschek said the consortium believed that “this proposal represents a win-win situation for our shareholders and for suppliers alike”.

“The pipeline is designed to transport gas initially from Azerbaijan and is fully scalable to meet future gas transport demand from the Caspian region and Middle East to the European markets,” the consortium added in a press release.

The consortium has, for years, been fending off critics who say there is not enough sourceable and available gas from Azerbaijan, Turkmenistan, Iraq and Iran to fill it.

Its current target is to transport 16bn cubic metres/year (565bn cubic feet/year) of gas to Europe, to help the EU reduce its dependency on Russian gas.

The Shah Deniz II group is expected to this summer announce which pipeline projects it will invite to source its gas.

Nabuccos shareholders are Austrias OMV, Germanys RWE, Hungarys MOL, Turkeys Botas, Bulgarias BEH and Romanias Transgaz.

However, on 26 April MOL said it was looking at selling its stake in Nabucco, citing concerns about potentially escalating costs, unsustainable financing requirements, inadequate project structure and management and the possibility that there would be a scarcity of gas available to the pipeline.

Germanys RWE, meanwhile, has said it is reviewing the likely costs and benefits of the project.

By: Will Conroy
+44 20 8652 3214

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