BP Executive: Caspian-EU Gas Pipeline To Be 10 Bcm, Expandable
March 26 2011 - 8:13AM
Dow Jones News
The pipeline that will be built to transport natural gas from
the Caspian basin to Europe will have a capacity of 10 billion
cubic meters a year and be expandable, a BP PLC (BP.LN, BP) top
executive said Saturday.
The comments by Iain Conn, BP's chief executive for refining and
marketing, suggest that the company, one of the main members of a
consortium negotiating the sale of natural gas from an Azerbaijan
gas field to Europe, might prefer a smaller pipeline to the
much-talked-about Nabucco, unless the 31 bcm project is redesigned
and scaled down.
"We are going to build a 10 bcm line into Europe that's
expandable," Conn said during a conference. "We've got to stop
being preoccupied by the word Nabucco," he said. Conn explained
that at the moment, there aren't 31 bcm of gas in the Caspian.
Three main pipeline projects are competing to get the roughly 10
bcm per year that are expected to flow to Europe from Shah Deniz
II, the second development phase of a field offshore Azerbaijan, as
early as 2017. Securing Central Asian gas is crucial for the EU's
priority of diversifying its energy supply, mainly away from
Russia, on whose exports many countries in Eastern Europe are still
heavily dependent.
Nabucco is the most-ambitious project. The 3,300-kilometer-long
pipeline would cost at least EUR7.9 billion ($11.13 billion) and
would transport gas across Turkey all the way to Austria.
The project has been strongly supported by the European
Commission, the EU's executive body, as the best one to open up the
gas-import line--the so-called Southern Corridor--from the Caspian.
It would have the capacity to transport more gas than only the Shah
Deniz's, possibly gathering supplies from Turkmenistan or Iraq as
well.
However, the commission itself has been recently pushing Nabucco
to cooperate with its competitors in an effort to secure the Shah
Deniz supply as a first step. Two projects compete with
Nabucco.
The Interconnector Turkey Greece Italy, being developed by
Italian utility Edison SpA (EDN.MI) and Greek monopoly gas company
DEPA, would carry about 10 bcm to southern Italy, just about the
amount of gas that Shah Deniz plans for exports to Europe.
The Trans Adriatic Pipeline--being developed by Norwegian oil
and gas giant Statoil ASA (STO, STL.OS), Swiss energy trading
company Elektrizitats-Gesellschaft Laufenburg AG (EGL.EB) and
Germany's E.ON AG (EOAN.XE, EONGY)--also would have a capacity of
about 10 bcm, with an option to double it.
BP holds a 25.5% stake in the Shah Deniz consortium. Statoil ASA
also owns 25.5%. The State Oil Co. of Azerbaijan, or Socar; OAO
Lukoil Holdings (LKOH.RS) of Russia; France's Total SA (TOT,
FP.FR); and National Iranian Oil Company all own 10% each, while
Turkey's TPAO owns 9%.
Nabucco's sponsors include some of Europe's biggest energy
companies such as Germany's RWE AG (RWE.XE, RWEOY) and Austria's
OMV AG (OMV.VI, OMVKY).
-By Alessandro Torello, Dow Jones Newswires; +32 2 741 14 88;
alessandro.torello@dowjones.com
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