Azerbaijan Favors TAP Pipeline as Route for Azeri Gas to Europe

Azerbaijan is counting on the Trans Adriatic Pipeline AG venture submitting a strong case to gas- field developers led by BP Plc as the best route to carry Azeri gas to Europe, the country’s Deputy Industry and Energy Minister Gulmammad Javadov said.

The 800-kilometer (497-mile) pipeline project is being developed by Statoil ASA, EON Ruhrgas AG and EGL AG to initially ship 10 billion cubic meters of Azeri gas a year to Italy via Greece and Albania from the Turkish border. The proposal is competing with the OMV AG-led Nabucco West development for the right to export the fuel.

Azerbaijan hopes TAP’s support-package submission at the end of March “will be strong and competitive enough” to be chosen as the southern gas corridor for transporting Azeri gas to Europe, Javadov said today in Athens at a ceremony where Albania, Greece and Italy signed an intergovernmental agreement that gives the political backing of the three countries to the TAP project.

“TAP was always technically good, financially robust and feasible and today’s agreement gives a strong political and legal foundation to TAP and a good chance to be part of the southern gas corridor project,” Javadov said.

The European Union is seeking a link with the Caspian Sea to diversify supplies of natural gas to curb dependence on Russian deliveries, which have been disrupted several times en route through Ukraine.

June Decision

In addition to 1.5 billion euros ($2 billion) in investment and the creation of 2,000 direct and 10,000 indirect jobs during the construction phase, TAP “will turn Greece from a second- tier energy destination to a strategic transit point,” Greek Prime Minister Antonis Samaras said today at the ceremony.

A group led by BP, which is developing the second phase of Azerbaijan’s Shah Deniz gas field, will choose between TAP and Nabucco in June. The group includes the State Oil Co. of Azerbaijan, or Socar.

To contact the reporter on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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