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Aliyev to visit Brussels to discuss energy cooperation with EU

June 21, 2013, 6:31 UTC+3
Experts say, however, that the main topic for discussions will concern the final route for Azerbaijani gas supplies to Europe
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BAKU, June 21 (Itar-Tass) - The development of cooperation between Azerbaijan and the European Union will be in the focus of Azerbaijani President Ilham Aliyev’s visit to Brussels to begin on Friday, June 21.

Aliyev is scheduled to meet with European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, who invited the Azerbaijani leader to come to Brussels on a visit.

The talks will focus on prospects for relations between Baku and Brussels, Azerbaijan’s European integration, and the development of democratic processes ahead of the upcoming presidential elections in Azerbaijan slated for October.

Experts say, however, that the main topic for discussions will concern the final route for Azerbaijani gas supplies to Europe. The Shah Deniz Consortium, which develops a large offshore gas and condensate field of the same name in the Caspian, will announce its decision on the route in late June.

There are two options: the Trans Adriatic Pipeline and Nabucco West. Whichever is chosen, it will become the main part of the Southern Gas Corridor lobbied by the EU and intended for brining Caspian gas to Europe.

Nabucco West will run from the Turkish-Bulgarian border to the vicinity of the gas hub at Baumgarten near Vienna, Austria. The pipeline will pass through Bulgaria, Romania and Hungary before it reaches Austria. The total length of the pipeline will be 1,300 kilometres.

Nabucco is supported by an Intergovernmental Agreement that was signed with states in July 2009 and has since been ratified in all five transit countries. This treaty, valid for 50 years, grants transit rights in Austria, Hungary, Romania, Bulgaria and Turkey. The feasibility of the base case is not affected by the Nabucco West proposal, and decisions on this issue will be taken by the shareholders of Nabucco depending on market demand and other factors.

The Nabucco legal framework - the Intergovernmental Agreement, the Project Support Agreements and the Gas Law Exemptions - support a pipeline project reaching up to the eastern and southern land borders of Turkey and with a design capacity of up to 31 billion cubic metres per year based on a 56 inch pipeline diameter. The engineering and permitting and ESIA processes have been progressed to secure this maximum technical configuration.

However, to achieve economic transport conditions, the pipeline design will have to be based on the actual demand for transportation services. This demand will be determined in the open season. The open season is the process by which all interested shippers of gas can book transportation capacity on Nabucco. Based on the outcome of the open season, a pipeline design will be chosen that is economic, scalable and connects to those upstream pipelines through which gas producers intend to make their gas available to Europe.

To offer economical transport conditions in such circumstances, Nabucco is already preparing an alternative technical design to the maximum technical configuration. This alternative design is based on a pipeline diameter of 48 inch and a pipeline from the Turkish-Bulgarian border to Austria. This would allow for a scalable transport between 10 and 23 billion cubic metres per year. Nabucco has given this alternative design the name “Nabucco West

Nabucco Gas Pipeline International CEO Reinhard Mitschek said earlier that if Nabucco West is chosen as the main route for delivering Azerbaijani gas to Europe, its construction would start in 2015 and the first gas supplies would begin in 2018-2019.

The Trans Adriatic Pipeline will start in Greece, cross Albania and the Adriatic Sea and come ashore in southern Italy, allowing gas to flow directly from the Caspian region to European markets.

Trans Adriatic Pipeline (TAP) AG is a joint venture company established with the purpose of planning, developing and building the TAP natural gas pipeline.

The Trans Adriatic Pipeline will bring natural gas from the Caspian region to Europe.

The shareholder structure of the Trans Adriatic Pipeline project comprises of Swiss Axpo (42.5 percent), Norwegian Statoil (42.5 percent) and German E.ON (15 percent).

The Shah Deniz Consortium has said repeatedly that it would choose the option that is most beneficial from the commercial and technical points of view.

The route will be used for transporting Azerbaijani natural gas produced under Stage 2 Shah Deniz development project. The first gas from Shah Deniz-2 will start to be produced in 2018 in the amount of 16 billion cubic metres a year, of which 10 billion cubic metres will be supplied to European markets.

The Shah Deniz field is believed to contain 1.2 trillion cubic metres of gas, while Azerbaijan’s overall proven gas reserves are estimated at 2.6 trillion cubic metres.

 

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