New Europe: All eyes on Shah Deniz as pipeline evaluation starts
Brussels, April 6 (AZERTAC). Influential European analytical portal "New Europe" published an article about the Shah Deniz field (http://www.neurope.eu/article/all-eyes-shah-deniz-pipeline-evaluation-starts). "At the end of June 2013, all energy eyes will be on Azerbaijan as the BP-led Shah Deniz consortium is expected to choose between the OMV-led Nabucco West and the Trans Adriatic Pipeline (TAP). On 1 April, the Shah Deniz consortium said it started a final “detailed evaluation” on the Nabucco West and the TAP proposals, which the two groups submitted last week", writes the article.
“The submissions allow the Shah Deniz consortium to conduct the final evaluation of each of the transportation options and make an informed decision on the preferred export route to Europe,” the consortium said, which is working in the Shah Deniz-2 natural gas field offshore Azerbaijan.
Nabucco West, a scaled down version of an original proposal, and TAP, which is developed by Norway’s Statoil, Germany’s EON Ruhrgas and Swiss EGL, are part of the Southern Corridor, a network of gas transit systems designed to reduce Europe’s reliance on Russian gas. The transportation proposals are expected to become legally binding by end of April, the BP-led Shah Deniz group said.
The partners in the Shah Deniz gas deposit, which also include Statoil, France’s Total and Azeri state oil company SOCAR expect to receive binding bids from potential gas customers in Europe within the next month, it said.
The $25 billion project to develop phase two of the Shah Deniz deposit in the Caspian Sea will start production in 2018 and in 2019 the first gas will be exported to Turkey’s border with the European Union through the planned Trans-Anatolia pipeline, or TANAP, BP Vice President for Shah Deniz Al Cook said in January.
The Shah Deniz deposit, estimated to contain 1.2 trillion cubic metres of gas, will deliver 10 billion cubic metres of gas to Europe a year, he said.
On 25 March, TAP announced the completion of its Front-End Engineering Design (FEED) for the project. As part of that Package, the FEED has finalised the pipeline's optimal routing, specifications for pipeline materials, design of valves and compressors, and logistical requirements for construction work. Statoil and E.ON Ruhrgas led the FEED work and are set to lead the next phase, that of Detailed Engineering.
Both Nabucco West and TAP have said they are most competitive. “We are pleased to offer the Shah Deniz II consortium the most competitive package to facilitate their final route decision,” Nabucco CEO Reinhard Mitschek said in a statement. Nabucco West says it is the only one that provides “direct access to the entire Balkan markets as well as to Italy and Greece”.
For his part, TAP's Managing Director Kjetil Tungland said he is “confident that our project has submitted the most compelling offer and in doing so, successfully meets the eight selection criteria set out by the Consortium”.
According to Tungland, since being selected as Shah Deniz's preferred southern route option in February 2012, TAP has made tremendous progress and notable achievements, including the signing of the Intergovernmental Agreement between Italy, Greece and Albania on 13 February.
TAP can now rely on a robust legal framework to the satisfaction of project investors and the Shah Deniz consortium, Tungland said. “TAP's characteristics remain unrivalled: our shareholders are world leading energy companies; TAP is the shortest and most direct solution, and consequently the most technically and commercially viable option. Our pipeline is truly designed with the future in mind,” Tungland said.
For a long time, the United States has encouraged the development of a southern oil and gas route west from the Caspian basin. US Ambassador to Azerbaijan Richard Morningstar and his predecessor Matthew J Bryza are among the influential Caspian experts expected to discuss energy and natural resources opportunities and challenges as well Azerbaijan’s economic potential during the World Economic Forum Strategic Dialogue on the Future of the South Caucasus and Central Asia on 7-8 April in Baku.
Parvana Garayeva
Special correspondent
AZERTAC, Brussels
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