Southern gas corridor takes shape

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A southern gas corridor is taking shape with one branch leading to Italy via the Trans Adriatic pipeline (TAP), and the other one, called "the northern route", to be built either by the Nabucco consortium or the South East Europe Pipeline project (SEEP) - which enjoys the support of an Azerbaijan gas consortium - the TAP director told EurActiv.

TAP Managing Director Kjetil Tungland dismissed the views recently expressed by a competitor, who said the decision by Azerbaijan that TAP should build the Greece-Italy link of the southern gas corridor was provisional.

"I can confirm the following: I have received a letter from SOCAR," Tungland said, referring to the Azerbaijani state gas company.

"In the letter, TAP is invited into 'exclusive negotiations' with Shah Deniz. The letter also states that the decision, by the Shah Deniz consortium, has been unanimously supported by all the members of the consortium, and that it is final. So the three words 'exclusive', 'unanimous' and 'final' are contained in the letter and it is clear that there is nothing provisional about their decision," Tungland said.

He was categorical that TAP didn't need the rival Turkey-Greece-Italy Interconnector, or ITGI, as a partner. Shah Deniz is a major Caspian Sea gas field managed by SOCAR and international partners.

"We don't see that we should dilute Shah Deniz' decision by joining forces with ITGI, that would be like taking several steps backwards," he stressed.

Asked about the northern branch of the southern gas corridor, which leads to the Baumgarten gas hub in Austria, he said that the decision is expected in summer. The Nabucco consortium and a less known project known as SEEP are competing for the southern route.

"For the export route to Italy, TAP is invited for exclusive negotiations. For the northern route, Shah Deniz are still evaluating the changed concept of Nabucco, they now know as Nabucco West, or whether to go for their own SEEP project," he said.

Recently the specialised press reports that according to a new conception, which is called Nabucco West, the Nabucco project would be downscaled to a pipeline to be laid from the Turkish-Bulgarian border to Baumgarten. According to Dow Jones Newswires, Nabucco West will have roughly half of Nabucco's initial capacity of 31 billion cubic meters.

Little information is available about SEEP. Asked if British Petroleum was behind the project, Tungland said that according to his information, the full Shah Deniz consortium was behind the project. Asked if that already means that SEEP is the favourite, he said: "I don't have that impression. Shah Deniz say they will evaluate SEEP against Nabucco West and make a final selection between the two this summer, in June I think."

He further explained that the next step would be the evaluation of the buyers and a final selection of which route and group of buyers to go for. This should happen well in advance of their final investment decision, which is scheduled for June 2013, Tungland explained.

Asked if the decision by Russia to build South Stream, the Gazprom-led project, at "maximum capacity" would affect the southern gas corridor, he said he saw "no impact whatsoever".

"As long as Shah Deniz is ready and willing to guarantee supplies of gas to Italy via the TAP pipeline, the South Stream project is irrelevant as far as TAP and Shah Deniz are concerned," he said.

Tungland declined to comment on the announcement by Gazprom yesterday (28 February) that the Russian gas monopoly was interested in the privatisation of DEPA, the gas company of Greece.

To read the full text of this interview please click here.

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