The Trans-Anatolian natural-gas pipeline project, which has
supplanted the European Union-backed Nabucco proposal as the
leading contender to carry Caspian gas to Europe, will be endorsed
by the Turkish and Azeri leaders at a signing ceremony later
Tuesday, the office of Turkey Prime Minister Recep Tayyip Erdogan
said in a statement.
The agreement, which is expected to require $7 billion-worth of
investment over the next six years, paves the way for Turkey and
Europe to receive gas supplies from the BP PLC (BP.LN)-led Shah
Deniz field in Azerbaijan.
TANAP, a proposal by Azerbaijan's state-controlled oil company
Socar and its Turkish peer, Botas, to build a pipeline to carry gas
across Turkey, effectively makes a portion of Nabucco's original
project redundant.
Because TANAP is a cheaper and more scaleable option, requiring
less than the 31 billion meters of gas a year needed by Nabucco, it
has found growing favor with the partners in the Shah Deniz project
that will produce the gas to be exported.
Nabucco's partners, which include Austria's OMV AG (OMV.VI),
Hungary's Mol Nyrt (MOL.BU) and German giant RWE AG (RWE.XE), has
since scaled back its proposal into a truncated form--called
Nabucco West--that would connect to TANAP and transport the gas to
central Europe from Turkey.
However, it faces a serious challenge from the E.On AG
(EON)-backed Trans-Adriatic Pipeline, which would also connect to
TANAP and route the gas via Greece, Albania and Italy.
The Shah Deniz partners will make a final decision on which
project to use next year.
Write to Alexis Flynn at alexis.flynn@dowjones.com