Nabucco Timeline Linked to Production Start at Shah Deniz

The Nabucco natural gas pipeline intended to transport gas from the Caspian region to Europe has linked its timeline with the start of production at the Shah Deniz gas field.

The Nabucco Gas Pipeline International GmbH can build the pipeline, which will run either from the Caspian via Turkey or from the Bulgarian-Turkish border, in three to four years “after a final investment decision is made,” spokesman Christian Dolezal told reporters in Sofia today.

“The production field has a timeline of when they start production and we want to align our efforts so that we can start transport to the market without any delay as soon as the gas is available from the Shah Deniz consortium,” Dolezal said.

Nabucco is competing for gas from Shah Deniz, with South East Europe Pipeline, or SEEP, and the Trans-Adriatic Pipeline. The group behind Shah Deniz which includes BP, Statoil ASA (STL), Total SA (FP) and the State Oil Co. (ATPG) of Azerbaijan, will select a route by mid-2013, BP Vice President for Shah Deniz Al Cook said in April.

Nabucco, which is a joint venture of Austria’s OMV AG (OMV), Germany’s RWE AG (RWE), Budapest-based Mol Nyrt. (MOL), Bulgargaz EAD, Romania’s Transgaz SA and Ankara-based Boru Hatlari ile Petrol Tasima AS, has faced repeated delays in the past eight years after struggling to secure fuel sources. Mol said last month that it isn’t prepared to finance the pipe and may sell its stake.

“We appreciate to have Mol as our shareholder in the projects, we have no written indication so far that the shareholder wants to withdraw from the project,” Dolezal said. “We have heard a few statements, but I’m not commenting on those statements, there must be a decision made in the consortium.”

Two Routes

Nabucco shareholders are discussing two versions of the pipeline, the initial 3,900 kilometer (2,425 miles) running via Turkey to Austria, estimated to cost 8 billion euros ($10 billion), and a shorter version, the so-called Nabucco West, which will start at the Bulgarian-Turkish border. The second option would be complimented by the planned Azeri-Turkish Trans- Anatolia Pipeline, known as Tanap, Dolezal said.

“We will submit a formal proposal for a Nabucco West option in the near future and then the shareholders of the Shah Deniz consortium will decide which option will be more appropriate for their purpose,” Dolezal said.

To contact the reporter on this story: Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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