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31.05.2012 12:50Nabucco Might Be Scrapped by End-June
An unnamed British report stated that the European Commission-backed project to reduce Europe's dependence on Russia for natural gas supplies will officially fall victim to changing market conditions before June is over
© Nabucco Gas Pipeline
The long-planned Nabucco natural gas pipeline, once envisioned as stretching from Azerbaijan to Austria, will be abandoned by the end of June, a Russian report says.
Citing unnamed London oil and gas analysts, the Itar-TASS news agency reported the European Commission-backed project to reduce Europe's dependence on Russia for natural gas supplies will officially fall victim to changing market conditions before June is over.
The news agency said British experts have concluded Nabucco's backers -- which include Austria's OMV, Germany's RWE, Hungary's MOL, Turkey's Botas, Bulgarian Energy Holding and Romania's Transgaz -- will abandon the USD10 billion effort as competitors appear to be gaining traction.
The consortium that controls Azerbaijan's Shah Deniz II gas field in the Caspian Sea is scheduled in late June to choose between a scaled-down version of Nabucco (dubbed Nabucco West) and the BP-backed South East Europe Pipeline as the candidate to go up against the Trans Adriatic Pipeline in a final decision on which will transport billions of cubic meters of gas annually to Europe.
The Shah Deniz consortium includes BP as well as Azerbaijan's state-owned oil company SOCAR.
The original vision for the Nabucco was for it to have a transport capacity of 31 billion cubic meters per year but, under the Nabucco West version, that has been scaled back to 10 billion cubic meters.
And while the first iteration was to run 2,500 miles from Azerbaijan's Shah Deniz II gas fields through Georgia, Turkey and Eastern Europe to Austria, the downsized pipeline would be 800 miles, starting at the Bulgarian-Turkish border.
Comments last week from BP Chief Executive of Refining and Marketing Iain Conn to an audience in Berlin also seemed to cast doubt on Nabucco's viability, the EUobserver reported, as quoted by UPI.
While Conn said the choice of an Azerbaijan-European pipeline connection would be "transparent" with "no pre-determined winner," he added that BP's own SEEP proposal "offers an efficient routing into and through these strategically important markets" in southeastern Europe, while not similarly praising Nabucco.
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