Wednesday, July 17, 2024
 
 

And The Azeri Gas Goes To… The Envelope, Please!

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ANAVYSSOS, Greece – After intense preparation, Nabucco West and the Trans-Adriatic Pipeline (TAP) are waiting for Azerbaijan to announce its decision about the pipeline to carry natural gas to Europe on 28 June. The BP-led consortium, developing Azerbaijan’s Shah Deniz field, is expected to choose between the two projects to transport 10 billion cubic metres of gas annually to Europe.

“I have a very good feeling that all the elements are now in place, meaning that we can tick off all the eight criteria that Shah Deniz is choosing so I think the work is done and we’re ready to be selected,” TAP’s Managing Director Kjetil Tungland told New Europe in an interview on 12 June on the sidelines of the 2013 Mediterranean Oil & Gas Conference in Anavyssos, south of Athens.

He welcomed the Greek government’s support for TAP. He noted that any project like TAP needs to have solid technical foundation, financial foundation and commercial attractiveness but fourthly they need to be backed by government support, in particular from those countries that it passes through, but also other governments that will be affected by the pipeline.

“Now we have really three governments backing us, we can see the interest for them in this being realised. But also the governments in the entire region are now supporting our project and therefore the chance of winning is really very high,” Tungland said.

“And I’m happy with this way of doing it. We made the technical assessment that this would be done safely. We were always backed by financially solid companies and we made an attractive commercial proposal to Shah Deniz and then government support is in place, whereas if we were to do it the other way around, starting with the government support, we might have missed on the other things – foundations that this needs to be based on,” TAP’s managing director said.

Tungland reminded that TAP is now enjoying wide government support in the entire region. On 12 June, the Ministers of Foreign Affairs of six countries – Albania, Bosnia and Herzegovina, Croatia, Greece, Italy and Montenegro – met in Dubrovnik, Croatia, to demonstrate their support for TAP and for the Ionian Adriatic Pipeline (IAP).

Supplying the Balkans is a very important upside for TAP, he said. “TAP is prioritising Greece, Albania and Italy, most of the volumes will end up in Italy,” Tungland said, adding, however, that connecting pipelines are an important opportunity for TAP, the countries in the region, but not the least for gas producers.

In April, New Europe spoke to Nabucco Managing Director Reinhard Mitschek in Baku, where he also appeared confident that his project “can prove commerciality and we can prove that we are the most competitive project in the so-called Southern Corridor”.

As an industry source told New Europe on 12 June, there should be a good indication of the Azerbaijani’s intentions by 24 June. “It’s not like the Oscars, where both groups have to wait till the last minute for Shah Deniz to open the envelope and announce which pipeline they’ve picked. There will be signs earlier,” the source said. In any case, Mr Mitschek and Mr Tungland better prepare their acceptance speech.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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