Shah Deniz begins evaluating binding transportation bids
By Aynur Jafarova
The consortium developing Azerbaijan's giant Shah Deniz field in the Caspian Sea has begun evaluating binding transportation offers from the Nabucco West and Trans Adriatic Pipeline (TAP) consortia, offering to carry Azerbaijani gas from the Shah Deniz field to Europe, BP Azerbaijan reported on Thursday.
According to the report, this represents another important milestone in the implementation of the Southern Gas Corridor.
The two consortia, Nabucco Gas Pipeline International and TAP, have been in extensive negotiations with the Shah Deniz consortium following delivery of their initial gas transportation offers at the end of March 2013. Those offers have now been approved by their shareholders and have become final and binding, the report said.
According to the report, furthermore, the consortium also received gas sales offers for more than 30 billion cubic meters (bcm) of gas per year from more than 15 different gas buyers across Europe. The gas sales offers will be considered alongside the transportation offers to determine the commerciality of the pipeline options and the respective markets.
The TAP and the Nabucco West projects are part of the Southern Gas Corridor, which is one of the EU's priority energy projects. The Southern Gas Corridor aims at diversifying the routes and sources of energy supply, thereby increasing secure delivery.
The Shah Deniz consortium is considering both TAP and Nabucco West, The consortium will make its final decision on the pipeline route in June and a final investment decision by October 2013.
The TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe. Gas to be produced within the second phase of Shah Deniz gas condensate field development is considered as the main source for TAP.
TAP's initial capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters.
Nabucco West is a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria.