Nabucco vows its gas pipeline could serve most of CEE as Azeri decision looms

By bne IntelliNews May 22, 2013

bne -

As a final decision looms on which pipeline will win the right to carry Azeri gas into Europe, the countries whose territories the Nabucco West gas pipeline will cross adopted a joint declaration on May 21 that suggests the route could be expanded to supply a bigger chunk of CEE.

Austria, Hungary, Romania, Bulgaria and Turkey agreed a text that stressed the potential of Nabucco West to supply the energy markets of the Western Balkans and the Visegrad group of countries. In a statement issued after a Nabucco Committee meeting in Bucharest, the governments said they are committed to developing the necessary gas interconnections "to ensure that Nabucco can also supply the countries in the southern and central-north dimension of Europe," according to Platts.

Competing with the Trans-Adriatic Pipeline (TAP) for the job of carrying gas from the second phase of Azerbaijan's giant Shah Deniz gasfield to European markets, Nabucco's view that it could expand demand by around 10 countries is a step up in lobbying efforts as the consortium operating the gasfield finalizes its assessment of the offers. A decision is expected in June.

Led by BP, the consortium must decide which of the competitors would meet the Trans-Anatolian Pipeline (TANAP), which will carry 16bn cubic metres per year of the Azeri gas across Turkey to the border with Bulgaria. TAP would run through Greece and Albania, before docking in Italy. Nabucco is planned to finish in Austria.

The declaration from the governments suggests Nabucco - owned by Turkey's Botas, Bulgaria Energy Holding, Romania's Transgaz, Hungary's FGSZ and Austria's OMV - could not only serve the markets of Southeast Europe set along the "Southern Corridor", but could then ship the gas to several other countries. Those extra markets include the Visegrad states of Poland, Slovakia and the Czech Republic, as well as Nabucco member Hungary. Countries of the Western Balkans, according to the EU, comprise Serbia, Croatia, Bosnia-Herzegovina, Montenegro, Macedonia and Albania.

Originally planned as an EU-backed mega-project to transport Caspian and Central Asian gas some 4,000km direct to Europe, bypassing Russia, Nabucco was shortened last year to "Nabucco West" due to failures to secure the necessary supplies to fill it. It is now upping the fight to secure the contract from Shah Deniz.

Last week, Nabucco Gas Pipeline International GmbH said that "shipper interest in registration and capacity booking in the Nabucco West pipeline has already exceeded expectations." The pipeline said it has received "strong interest" from a variety of shippers, including potential shippers not part of Nabucco, the Shah Deniz consortium or its buyers. "The high levels of interest clearly show the demand for the opening of the Southern Gas Corridor connecting European markets to Caspian gas, and also for Nabucco," Nabucco consortium CEO Reinhard Mitschek said.

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