Azeri gas set to reach EU via Turkey, Greece, Italy

BAKU – ANKARA - BRUSSELS

A giant oil drilling platform called ‘Uranus’ passes through the Bosphorus before reaching Constanta Harbor in Romania. DAILY NEWS photo, Hasan ALTINIŞIK

The operators of the Shah Deniz 2 field – BP, Statoil, Azeri state energy firm SOCAR, Total, and others – officially announced June 28 in Baku that they had chosen the Trans-Adriatic-Pipeline (TAP) to carry Azeri gas to Europe across Greece, Albania and Turkey, rather than the Nabucco West project.

“Azerbaijan’s first gas to Europe will be exported via the TAP pipeline,” said the consortium’s spokesperson Gordon Birrell, who is also BP regional president for Azerbaijan, Georgia and Turkey.

The TAP pipeline will collect Azerbaijani gas in Turkey via another gas pipeline, the Trans-Anatolian Gas Pipeline (TANAP) and carry it across Greece and Albania before reaching southern Italy, stretching a total of 870 kilometers (540 miles), according to Reuters.

The Nabucco West project was more ambitious, tracking a 1,329-kilometer route north from Turkey to Austria via Bulgaria, Romania, and Hungary.

“It is been very good for us, as the consortium members, to select TAP in terms of its commercial efficiency, security and market advantages,” Azerbaijan Industry and Energy Minister Natig Aliyev said yesterday, adding that Azerbaijan, Georgia and Turkey would benefit economically from the realization of the Shah Deniz 2 project, Anadolu Agency reported.

The Shah Deniz field will be cost around $40 billion with the accompanying pipelines, BP’s Birrell noted. “We plan to flow 16 billion cubic meters [bcm] of gas in the initial stage [in 2019], increasing more gradually,” he added.

“Meanwhile, BP, SOCAR and Total have options to join as shareholders of TAP, and more will most likely join,” TAP Managing Director Kjetil Tungland told Reuters.

At the same time in Ankara, Turkish Energy Minister Taner Yıldız said Turkey had been offered to become a partner of TAP. “Once we assess the project thoroughly, we would reconsider the offer,” Yıldız said.

Turkey and Azerbaijan reached an agreement on building TANAP in June 2012, to carry Azerbaijani gas to Turkey’s European border.

“The consortium had been trying to decide whether the gas would be carried to Europe across the southern route [via TAP] or the northern route [via Nabucco West]. They have decided to pick TAP. But there is no difference for Turkey,” Yıldız added.

Turkey had initially held a 20 percent stake in TANAP, while Azerbaijan’s state oil company SOCAR held 80 percent. Then BP, Statoil and Total took 29 percent of SOCAR after the TANAP project had been finalized. The approximately 1,750 km long TANAP is planned to be completed in 2018, and will be connected to TAP.

Minister Yıldız said he hoped the ongoing political instability in Greece and economic problems in Italy would not create any setbacks in TAP, adding that more gas pipelines were needed to meet Europe’s gas demand, which is expected to reach 700 bcm by 2030.

EU Energy Commissioner Guenther Oettinger also welcomed the selection of TAP to ship Azeri gas to the European Union, saying it would provide increased security of supply on. “We now have a new partner for gas and I am confident that we will receive more gas in the future,” Oettinger said in a statement June 28.

The selection of TAP by the Shah Deniz consortium appears to have made the countries on the TAP and TANAP routes very happy, particularly economically suffering Greece.

“The selection of TAP constitutes some sort of vote of confidence for Greece. We could attract more than 1.5 billion euros of FDI thanks to TAP; this has been the biggest economic development for Greece for the last decade,” Greek Prime Minister Antonis Samaras said June 28 in Brussels, Anadolu Agency reported.

As Yorgo Kırbaki reported in daily Hürriyet last week, Greece will earn 320 million euros, and around 2,700 new jobs will be created by the project during the construction period between 2015 and 2018.

In the next 50 years, Greece is expected to earn around 35 billion euros from the project, posting 5 billion euros of net profit, according to the story.