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BP-Led Shah Deniz Investors to Pick Pipeline Project by Year-End

The BP Plc-led investors in the Shah Deniz gas project will choose by the end of the year between three pipeline projects designed to deliver gas to Europe, bypassing Russia.

The partners are choosing a route to send 10 billion cubic meters of the fuel, enough to supply Austria for a year, to Europe in 2017, which may rise to 24 billion cubic meters in 2019, said Richard Tawse, head of finance at BP Azerbaijan.

The European Union-backed Nabucco link is vying for Caspian fuel supplies with the smaller Trans-Adriatic Pipeline planned by Statoil ASA (STL), a partner in Shah Deniz, and EON AG, and the ITGI link proposed by Edison SpA (EDN), Depa SA and Turkey's Boru Hatlari Ile Petrol Tasima AS. Nabucco may ship 31 billion cubic meters a year to reduce reliance on Russia, which supplies about 25 percent of Europe's gas.

Azerbaijan and Turkey may conclude a long-awaited deal on the transit of the Shah Deniz gas to Europe "in the very near future," Tawse said at a gas conference in the Azeri capital, Baku. The deal is necessary for the investors to proceed with the second phase of the Shah Deniz project.

Reha Muratoglu, a department head at Turkey's Energy and Natural Resources Ministry, said his government intends to complete the talks by the end of October.

The talks have dragged on for five years, said Elsad Nasirov, vice president of the State Oil Co. of Azerbaijan, a partner in Shah Deniz.

"We are ready to sign a deal today even if the Turks are also ready," Nasirov said. "Talks are continuing, but I do not know when they will produce results."

Source: Bloomberg

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