The consortium of companies behind the planned Nabucco gas pipeline has agreed an option to sell 50 per cent in the project to a group developing the Shah Deniz 2 gas field in Azerbaijan, increasing the odds of securing a gas supply for the pipeline.
At a meeting of the Nabucco steering committee in Sofia on January 10, the consortium also agreed the joint funding of development and construction costs of the shortened Nabucco West pipeline, with a formal agreement expected to be signed in Vienna on January 18.
The Shah Deniz 2 group – which includes British Petroleum, French firm Total, Norway’s Statoil and Azeri state-owned company Socar – has previously secured a similar 50 per cent option with the Trans-Adriatic Pipeline (TAP) project, being developed by Statoil, Germany E.ON Ruhrgas and Swiss firm EGL.
TAP aims to take Azeri gas from Turkey’s European border and transport it to Italy via Greece and Albania. Nabucco West would have the same starting point, crossing Bulgaria, Romania and Hungary on its way to Austria. Both projects would connect to the Trans-Anatolian Pipeline (TANAP), currently under development, which would cross Turkey and bring Azeri gas to Europe’s doorstep.
Nabucco, a project in the works since 2005, although only formally launched by the signing of an intergovernmental agreement in July 2009, currently has six shareholders with equal stakes – Turkey’s Botas, Bulgaria’s Bulgargaz, Romania’s Transgaz, Hungary’s MOL, Austria’s OMV and Germany’s RWE. The latter has started negotiations last year to sell its stake to OMV, saying it was no longer assured of the project’s viability.
The European Commission, however, remains among Nabucco’s most outspoken supporters, seeing the project as a means of diversifying gas supplies to European consumers and reducing reliance on Russian gas.
The Shah Deniz group is expected to pick between TAP and Nabucco West in the summer. Construction would have to start soon after and the first gas could flow as early as 2015, which is when commercial extraction at Shah Deniz field is expected to begin.
Bulgaria could begin work on its stretch of Nabucco, expected to run for 424km, as early as mid-2013, Bulgarian Prime Minister Boiko Borissov said at the meeting. Later, Economy and Energy Minister Delyan Dobrev said that this referred to the standing proposal by the Bulgarian Government to build a 225km link between the Turkish and Bulgarian gas grids, which could be included at a later date into the Nabucco infrastructure.
Bulgaria could either fund the project on its own, through the state-owned Bulgarian Energy Holding, or it could be undertaken by a Nabucco subsidiary, drawing part of the funding from international lenders like the World Bank or the European Bank for Reconstruction and Development (EBRD). The total costs of the Bulgarian-Turkish gas grids link is estimated at between 300 million euro and 350 million euro.
Bulgaria’s Environment Ministry gave a preliminary approval to the Bulgarian stretch of the Nabucco West pipeline in December 2012. Public consultations with residents of 30 municipalities that the pipeline will cross have been scheduled for February.
(Photo: Alek Kawka/ Nabucco Gas Pipeline International GmbH)