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3/28/13

European Energy Supplies: Azerbaijani-Turkish gas ambitions

The Nabucco consortium have  signed a cooperation deal with Turkey’s Trans-Anatolian Pipeline (TANAP).

he two parties had agreed to exchange technical and other strategic information to support the development of their projects, which will connect at the Turkish-Bulgarian border if the Nabucco project is chosen.

The agreement also highlights the need for further diversification of natural gas transportation routes to improve reliability and diversification of gas supplies to the European Union and the South Eastern Europe regions.

Whatever is the statement above, the deal was made to oust Russia from the Southern Gas Corridor. Turkey aims to earn as much as possible for gas transit to Europe. The wish is quite understandable, however hardly feasible. The two pipeline projects will never be implemented. Nabucco, widely advertised several years ago with the help of Azerbaijan and Turkey, is becoming a past matter never having a chance to become implemented. Baku sought for new ways to transport gas, with Nabucco, which was meant to decrease Europe’s dependence on Russian gas suppliers, having come in handy.

However, companies, involved in implementing the project thought it much too costly, with actual spending assessed at Euro 15 billion. Also, project participants would never manage to secure enough contracts to replace Russian supplies. Thus, expert forecasts of Nabucco’s failure came true, no one willing to take risks.

There’s another project aimed against Russian gas supplies to Europe. Azerbaijan and Turkey inked a deal for TANAP project in June 2012, with the pipeline to be annexed to those leading to Central Europe or Italy.

TANAP project envisages construction of a pipeline from Turkey's eastern border to the western border to transport gas from Azerbaijan's offshore Shah Deniz field to Europe. Initial capacity of the pipeline will be 16 billion cubic meters. Some 6 billion cubic meters of the volume will be supplied to Turkey, while the rest will be transported to European markets. According to preliminary estimates, the project cost might range from 7 to 10 billion euros.

The agreement stipulates for Azerbaijan's state energy firm SOCAR to hold 80 percent in the TANAP project, while Turkey's BOTAS and TPAO have a 20 percent share.

Read more: Azerbaijani-Turkish gas ambitions - PanARMENIAN.Net

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