By Emre Peker
ISTANBUL--BP PLC (BP) and its partners in an Azeri natural gas
field are seeking an equity stake of about 50% in the Nabucco
pipeline that is competing to provide an alternative source of
energy for Europe, a BP executive said Thursday.
The two sides have been in talks for three months and may reach
an agreement by year-end, said Al Cook, BP's vice president of the
$40 billion Shah Deniz development, in an interview at the Atlantic
Council's energy conference in Istanbul.
BP and Socar, Azerbaijan's state-oil company, have been leading
the three-month-old effort that mirrors an agreement struck earlier
this year with the Trans-Adriatic Pipeline, or TAP, where members
of the Shah Deniz consortium took an equity stake and started
funding engineering costs, Mr. Cook said.
Companies are rushing to provide Azeri gas to the European
market in an effort to wean the region off Russian gas. The
consortium will decide by June next year whether to transport the
gas to Europe via Nabucco Gas Pipeline International GmbH's western
arm starting in Bulgaria or through TAP starting in Greece, Mr.
Cook said. BP's preference is to carry the gas to Turkey's western
border with the Trans Anatolian Natural Gas Pipeline Project, or
TANAP, in which the London-based oil and gas firm holds a 12%
stake.
One of the BP-led project's biggest competitors in supplying
Europe with natural gas is Russian major OAO Gazprom (GAZP.RS),
which finalized Thursday its last investment agreement to develop
the South Stream pipeline that may provide 14% of Europe's gas
consumption by 2015.
"We don't see the South Stream as a major threat," Mr. Cook
said. "We're in competition with other sources of gas for the
entire European market and when you look at South Stream to a large
extent it's a redirection of Russian supply rather than brand new
large volumes… From a European competition perspective, we expect
to be producing gas into Europe alongside Russia, and whether that
Russian gas comes into markets through existing pipelines--North
Stream--or South Stream, that doesn't change the fundamentals of
both sources of gas being required for the European markets."
Write to Emre Peker at Emre.Peker@dowjonews.com
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