Baku, Fineko/abc.az. The Nabucco Gas Pipeline International (NGPI), consortium on building of gas pipeline Nabucco from Asia to Europe through Turkish territory, starts accepting applications for gas supplies to the European Union (EU).

Today at the Baku gas infrastructure conference NGPI managing director Reinhard Mitschek said that before the end of 2009 or in early 2009 the consortium was going to launch negotiations about gas transportation to Europe via its pipeline and intended to sign a contract for minimum 1 bn cu m.

“Simultaneously the consortium is ready to suggest for potential shippers both long- and short-term contracts for gas pumping and their combining.

Tariffs will be fixed on principles of the European Energy Charter and in dependence on availability of free capacities. At NGPI website potential shippers will be able to know of free periods of pumping and calculate tariff with help of special calculator,” Mr. Mitschek said.

At the same time the consortium is ready to allot pumping capacities of up to 16 bn cu m for the third parties and distribute 15 bn cu m among its shareholders.

According to Mr. Mitschek, beginning of Nabucco pipeline construction is scheduled for 2011 and first supplies via it for 2014.

Earlier consortium’s press secretary Christian Dolezal informed that Nabucco construction would be launched in 2011 and in 2016 “they will continue constructing the gas pipeline from Ankara to the European Union”.

“Currently no one of the contracts for gas supply via the pipeline has been signed, but we are holding negotiations, and as soon as they appear, the company will inform of that at once. Presently, there are 16 companies wishing to supply gas via the pipeline. All contracts will be signed in open tenders,” Mr. Dolezal stated then.

But today Mr. Mitschek changed this approach as well.

“Azerbaijan is an important source for Nabucco along with Iraq and possibly precisely it will sign the first contract for gas pumping via the pipeline,” Mr. Mitschek said.

On 13 July an intergovernmental agreement between Turkey, Austria, Bulgaria, Romania and Hungary was signed on Nabucco gas pipeline construction in Ankara.

Germany did not put its signature under the agreement as it is not a transit country.

A day before the signing ceremony the pipeline lost one of the possible sources of gas for its filling-in.

Iraqi government’s press secretary Ali ad-Dabah claimed that Iraq had not free gas for export via Nabucco pipeline.

Before Turkmen president Gurbanguli Berdimukhamedov stated that his country was ready to supply gas for Nabucco pipeline but the United States decided to tackle the problem of gas deficit for the pipeline quite another way.

US special envoy for Eurasian energy Richard Morningstar said that Russia could become a gas supplier for Nabucco and the project participating countries should regard Russia as a partner.

Readiness for gas supply for Nabucco project was expressed by Iraq, Egypt and Syria, but Turkmenistan, together with Azerbaijan, Iran and Iraq are being considered as the key suppliers.

Earlier Turkish Energy Minister Taner Yildiz stated that the agreement signing had become possible as Turkey refused from a condition that 15% of gas to run via the pipeline should remain in Turkey. Instead Turkey obtained the right of future access to European gas reserves through Nabucco. For this the pipeline will be constructed to carry gas in two directions – from east to west (from Turkey to Austria) and from west to east back to Turkey.

Earlier, agreement signing in Ankara was scheduled for 25 June of the year.

Azerbaijan promised 7 bn cu m a year for transportation via the pipeline but Turkish sources consider the volume is insufficient to cover European Union’s annual needs of 20 bn cu m.

The Nabucco consortium participants are ready for involvement in tenders to be held before the end of 2009 for purchase and transportation of gas to be produced within Stage 2 of Shah Deniz Gas Project (Azerbaijan sector of the Caspian Sea).

Signing of the agreement is one of the preliminary conditions for making a decision on project financing.

At the same time Mr. Mitschek indicates that in the 1st half of 2010 it is planned to make an investment decision and launch construction works.

For making an investment decision the Consortium needs to have guarantied delivery of 8-10 bn cu m of gas for the project to be attractive for investors and sponsors. The pipeline capacity then will be increased up to 20 bn cu m and 65 bn cu m at the next stage.

In the 2nd half of 2009 the Consortium is planning to launch environmental impact assessment (EIA). Then there will be carried out detailed engineering in different countries and clarified specifications for the tender on selection of the contractors.

Nabucco Project start is scheduled for 2014. Nabucco pipeline will supply gas to Europe across the border of Turkey with Georgia or Iran by-passing Russia.

Initially Azerbaijan was concerned with lack of progress in project officialization.

Azerbaijan agrees that the project is important and interesting, but indicates that the project participants are going to tackle a range of difficult challenges. Besides an intergovernmental agreement which the participants are planning to sign until the end of this June, they should solve the matter of definition of the gas pipeline route and re-purchase of land plots for it. Besides, the project participants do not have a transit agreement.

The presentation documents of Nabucco Gas Pipeline International say that at primary stage it is expected to lay only 2 000 km pipeline from Baumgarten to Ankara in Turkey and then receive gas from Azerbaijan and Ira via available Turkish gas pipeline network. At primary stage capacity of pumping via Nabucco to be built in 2011-14 will be only 8 bn cu m. Construction of the second stage of the pipeline – from Ankara to the Turkey’s borders with Georgia and Iran – can begin in 2014-15 and is intended to increase transportation capacity up to 31 bn cu m.

Meanwhile, it is obvious that at primary stage it will be built only 2,000 out of 3,300 km of design capacity of the pipeline including only 700 km out of 2,000 of its length in Tukrey. At primary stage the pipeline will not promote to expansion of capacity of neither Turkish pipeline network in the east of this country nor pipeline systems of other countries, including Georgia and Azerbaijan. Most probably, at the second stage Nabucco will make (or will try to make) the supplier countries to increase independently pumping capacities to the point of gas delivery in the region of Ankara.

Earlier, Nabucco Gas Pipeline International’s managing director Reinhard Mitschek stated that to launch the works Nabucco needs from 8 bn up to 12 bn cu m of gas expected to come from Azerbaijan.

At the same time the company is not going to buy gas independently giving this right directly to the purchasing countries.

Direct construction of 3,300 km Nabucco pipeline will start in 2011 and end in 2014. Nabucco project is estimated at EUR 7.9 billion and its capacity will make 31 bn cu m a year. The EU is ready to disburse up to EUR 272 million to finance initial stages of the pipeline construction.

The European Commission’s representative for Central Asia Pierre Morel voiced a doubt about pipeline’s commissioning in 2013. In his opinion, the pipeline construction can take 5-12 years.

Earlier World Bank’s country director for Turkey Ulrich Zakhau stated that WB was ready to give financial support to Nabucco project but on the condition of guarantees of pipeline filling-in by gas producers.

Later this January the European Commission agreed to allocate 250 million euro to the European Investment Bank (EIB) for financing the project. On 7 May the European Union will hold an energy summit at which it is going to publish a decision about start of Nabucco pipeline construction.

At the same time Central Asian gas states (Turkmenistan, Kazakhstan and Uzbekistan) confirm their readiness to sell natural gas to Russian monopoly Gazprom at European prices. As a result, the only potential gas supplier for Nabucco pipeline is Azerbaijan whose “big gas” expected after 2013 has not been contracted.

The Consortium has not settled project financing problem so far as well.

According to EIB president Philippe Maystadt, EIB will undertake 25% of project expenditures out of 200-300 million euro demanded at the first stage (cost of entire project is 7.9 bn euro), but only after readiness of project feasibility study and as minimum signing of intergovernmental agreement on it.

Thomas Mirow, the president of the European Bank of Reconstruction & Development (EBRD), set out quite more conditions of EBRD participation in project financing - contracts on gas supplies, investment guarantees, and technical parameters, environment assessment impact and study of public opinion in the regions through which Nabucco pipeline will run.

The companies participating in Nabucco project with equal stakes (16.67%) are OMV Gas & Power GmbH, MOL (Hungary), Bulgargaz (Bulgarian), Transgaz (Romania), Botas (Turkey) and RWE Supply & Trading GmbH (Germany). In December 2008 OMV and RWE established Caspian Energy Company (CEC) that will study the possibilities of gas transportation from Caspian region to Europe.

16.09.2009 17:08