BP PLC (BP) has proposed an alternative pipeline project to feed Europe with Caspian natural gas, as the fight among competing pipeline projects heats ahead of a deadline that is being closely watched by European governments and energy companies.
BP PLC (BP) has proposed an alternative pipeline project to feed
Europe
with
Caspian natural gas, as the fight among competing pipeline projects heats ahead
of a deadline that is being closely watched by European governments and energy
companies.
The BP project, called South East Europe Pipeline, would link a major
Azerbaijan
gas
field to a gas hub in
Austria
,
running from western
Turkey
across
Bulgaria
and
Romania
to
Hungary
's
border, a similar route to that of EU-backed Nabucco pipeline. There are two
other leading pipeline proposals for tapping Azeri gas, in addition to the
Russian-backed South Stream pipeline that would increase Russian gas exports to
Europe
.
As the operator of the Shah Deniz field - the main Azeri gas natural field - BP
holds influence over which pipeline the Shah Deniz consortium will choose. News
of the BP proposal comes just ahead of an October 1 deadline for competing
pipeline projects to present a detailed transportation offer to the Shah Deniz
consortium. The consortium is expected to make a final decision by the end of
the year.
A BP spokeswoman said the BP line would be considered alongside the other
options.
"While this is not an advanced project, this is a possible export
solution," BP's spokeswoman for Azerbaijan Tamam Bayatly told Dow Jones
Newswires. "The three pipeline projects will submit their proposals by
October 1, and in parallel there is a fourth possible option that will be
looked at," she said.
The European Union has pushed hard to secure gas from Shah Deniz to reduce its
dependency on
Russia
,
especially among Eastern European EU members. The EU argues Nabucco is the best
option because its greater size would effectively open a "southern
corridor" for Caspian gas transit to
Europe
beyond Shah Deniz supplies.
But BP and
Azerbaijan
's State
Oil Company --two of the main players in the Shah Deniz consortium-- have
expressed their concerns about Nabucco, because they are afraid that two thirds
of the pipeline --whose capacity is planned at 31 bcm per year for a length of
3,900 kilometers-- will remain empty, making transportation of their gas too
expensive.
"We want a pipeline that will make our Shah Deniz project commercially
viable by reducing pipeline costs, whilst maintaining optionality to scale up
capacity as new production becomes available," Bayatly said.
The pipeline proposed by BP would be 1,300 kilometers long, a third of the
length of Nabucco, making it a cheaper project.
Another competitor is the Trans Adriatic Pipeline, or TAP being developed by
three companies, including Norwegian oil and gas giant Statoil ASA (STO,
STL.OS), which also has a stake in Shah Deniz.
ITGI, Interconnector Turkey-Greece-Italy, backed by
Italy
's
Edison SpA (EDN.MI) and Greek gas monopoly DEPA, is the third challenger and
the most advanced project in terms of engineering and construction permits.
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