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Azerbaijan to choose between Nabucco, TAP on commercial terms

Published: May 1, 2013 | 3:30 pm
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(CNA)-Azerbaijan’s choice between two pipeline projects to carry its gas to Europe must focus on obtaining the strongest commercial terms, Industry and Energy Minister Natik Aliyev said on Tuesday (30 April), writes EurActiv.

The Nabucco West and Trans Adriatic Pipeline (TAP) projects offer different routes to Europe from the Shah Deniz II field in the Caspian Sea.

“There are a lot of factors [when] we evaluate these two projects, but the main now is … commerciality,” Aliyev said after meeting Norway’s Minister of Petroleum and Energy Ola Borten Moe in Oslo.

“They [energy companies] have to profit to cover the capital costs … It is very important for the foreign partners to have the most effective, commercial project for delivering gas from Azerbaijan,” he said.

The consortium developing Shah Deniz is led by BP, Norway’s Statoil, Azeri firm SOCAR and Total. It aims to select a pipeline project by June.

Statoil is also a partner with TAP, along with Germany’s E.ON Ruhrgas and Swiss firm Axpo Holding.

A shift away from Russia

Azeri gas offers Europe a means of reducing its dependence on Russia which currently provides around a quarter of the continent’s 500 billion cubic metre per year (bcm/y) annual gas consumption.

Analysts have said Nabucco West would serve the most Russian-reliant regions, in central and southeast Europe, better than TAP.

But they also see advantages in TAP’s shareholder structure as it is less state-dominated.

Nabucco West would carry gas from the Turkish border through Bulgaria, Romania, Hungary and into Austria.

TAP would run from Turkey through Greece, Albania and into southern Italy.

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