Nabucco Rethinks Itself
29th February 2012
The Nabucco Gas Pipeline International consortium is reported to be reassessing its role as a major gas importer into Europe now that it appears to have been trumped by the gas pipeline plan unveiled by Turkey and Azerbaijan last December.
Nabucco is now considering a plan that would have it build a pipeline from the Bulgaria – Turkey border to the Central European Gas Hub in Baumgarten, Austria, following Nabucco’s proposed route through Bulgaria, Romania, Hungary and Austria. The plan to build a new pipeline, with branches beginning at the Georgian and Iraqi borders in Turkey, would be redrawn, with the stretch across Turkey eliminated.
Late last year, following the submission of bids on October 1 by the three consortia competing for Azerbaijan’s Shah Deniz Stage 2 (SD2) gas shipments, Azerbaijan’s state – owned oil and gas company Socar and Turkey’s Petroleum Pipelines Corporation (Botas) announced that they had formed an 80:20 partnership to build a 10 billion cubic meter/year (bcm/y) across Turkey from the Georgian to the Bulgaria border. The Trans Anatolian Pipeline (TANAP) would have an initial capacity of 10 bcm/y – the amount of gas that SD2 will have available for export to Europe – and Turkish officials have said the pipeline could be expanded to 30 bcm/y. Azerbaijan is planning to expand its natural gas production to 50 – 55 bcm/y by 2025.
The announcement virtually blew the 31 bcm/y Nabucco project out of the water. Now estimated to cost €12 billion, Nabucco had been considered too much pipeline for the amount of gas available. Unable to secure gas from Azerbaijan, the project in years previously had turned to lining up gas projects in Iraqi Kurdistan, but no gas export deals were ever signed.
The Shah Deniz partners, led by BP and Statoil, are expected to award the gas shipment contract by the middle of this year. Other contenders for the 10 bcm/y from the Caspian is the Interconnector – Turkey – Greece – Italy (ITGI) and the Trans Adriatic Pipeline (TAP), both of which have initial capacities of around 10 bcm/y. Also, a few days before the October 1 bidding deadline for SD2 gas, BP announced that it was giving consideration to a pipeline project that it and other Shah Deniz partners would back, the South East Europe Pipeline (SEEP), which would also have a 10 bcm/y initial capacity and travel roughly the same route as the one proposed by Nabucco into Central Europe.
The TANAP and SEEP pipelines together would remove Nabucco as a feasible project.