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Azerbaijan group hones gas delivery options

The consortium developing a vast natural gas field in Azerbaijan has narrowed down the number of pipeline options for transporting the gas to European markets, rejecting a project backed by the Italian and Greek governments.

The Shah Deniz consortium chose the Trans-Adriatic Pipeline, or TAP, for the Italian leg of the pipeline, dropping the rival Interconnector-Turkey-Greece-Italy, or ITGI.

The consortium, which includes BP, Statoil and Azerbaijan’s state oil company SOCAR, is spending up to $22bn to develop the second phase of the Shah Deniz field, in the Azeri sector of the Caspian Sea.

Last year, the partners launched a tendering process to select a transport option for moving the gas into Europe. Two projects were proposed that would bring the gas to Italy – TAP and ITGI, which is backed by Edison and the Greek gas company Depa. Two others – Nabucco and the BP-backed South-East Europe Pipeline, or SEEP – would transport the gas to eastern Europe.

BP said TAP represented a “better offer” for Shah Deniz. The company said the decision to go with TAP was based on eight criteria, ranging from commerciality to “project deliverability.”

BP said the number of pipeline options would fall to two by the middle of this year when the consortium chooses between Nabucco and SEEP for the central European route. It will then choose between the Italian and central European routes and make a final decision next year.


Source: The Financial Times

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