TAP outgunned Nabucco for Azeri gas on most fronts

 Reuters

* TAP beat Nabucco on 7 of 8 criteria

* The reason was not high gas prices in Italy, Greece
* Government continues to support South Stream
* GALSI pipeline important for Italy

The Trans-Adriatic Pipeline (TAP) project outscored rival Nabucco West on virtually all fronts to win the race to carry Azeri gas into Europe, a junior minister at Italy's Industry ministry told Reuters.

Azerbaijan's state energy company SOCAR and its partners in the Shah Deniz II gas field, including BP and Statoil , said on Friday they had selected TAP.

The project, linking a Turkish pipeline to southern Italy via Greece and Albania, plans to deliver 10 billion cubic metres (bcm) of Azeri gas to Europe each year beginning in 2019.

BP said there was a "substantial" commercial difference between the two competing pipeline projects, including the cost of shipping the Azeri gas and gas prices in the respective markets.

The head of Austria's OMV, part of the rival Nabucco project, said last week the TAP project had been chosen because of high gas prices in Italy and Greece.

"It was not for high gas prices in Italy and Greece," Claudio De Vincenti said in an interview.

Russian gas pipeline could doom Europe's Nabucco plan

Reuters


* Europe, U.S. support for Nabucco weakened
* Azeri consortium expected to pick winner in June
* Gas due to flow to European Union from 2019

Europe's grand plan for a gas pipeline from the Caspian Sea that would make its eastern states less reliant on Russia may have been fatally undermined by Russia's even bigger project.

As Azerbaijan nears a decision on which pipeline to choose for its future exports, the Nabucco plan that was long the European Union favourite could lose out to the more modest Trans Adriatic Pipeline (TAP) across Greece to southern Italy.

In a complex equation based on politics as much as economics, TAP is in the ascendancy over the Nabucco pipeline to Austria in the face of Russia's $39 billion South Stream plan.

"The question is: 'Is Nabucco viable if South Stream is built?'" said Andrew Neff, Moscow-based principal energy analyst with research firm IHS.

The decision between TAP and Nabucco is expected in June from partners in the Shah Deniz consortium, led by gas field operator BP and Azeri state energy company Socar.

The European Union won't have a direct say in the choice, but its recent switch to "project neutrality" from support for Nabucco could make a big difference. It now says it would be happy with either pipeline or even both.

"There has been a dramatic shift," TAP's External Affairs Director Michael Hoffmann told Reuters.

Nabucco spokesman Christian Dolezal, however, said his project retained strong political support.

TAP Countries Give Tripartite Support

Natural Gas Europe

The governments of Albania, Greece and Italy have created a special committee to coordinate support for the Trans-Adriatic Pipeline (TAP), one of two major contenders for the contract to convey gas from the Shah Deniz 2 field off Azerbaijan.

External Affairs Director for TAP, Michael Hoffmann, said the support was a major vote of confidence in his consortium, which is led by Norwegian major Statoil.

TAP is included in the so-called Southern Corridor, a planned network of pipelines meant to offer alternatives to Russian gas for Europe.

Albania, Greece and Italy are all transit countries for TAP. When the gas supplies arrive in Italy, they will then be transported on to a range of customer countries, according to the plan.

TAP is up against the ambitious Nabucco West pipeline, which is backed by other European countries. Also on Wednesday, the Nabucco website recorded a call by Austria, Bulgaria, Hungary and Romania to support his alternative in the Shah Deniz decision.

On Monday the New York Times reported that Hungarian prime minister Mark Orban had said that MOL, his contry's participant in Nabucco West, wanted to withdraw from the project.

A BP-led consortium operating Shah Deniz is due to decide on the successful candidate by June.

Source: http://www.naturalgaseurope.com/tap-countries-give-tripartite-support

Nabucco and TAP gas pipelines could both be built one day -TAP

Reuters

Both of the projects vying to pipe Azeri gas to the European Union can be built but not yet, a senior official from one of them said on Wednesday.


Second pipeline could take another five-to-10 years
Decision on winning project expected by mid-2013



The governments of Albania, Greece and Italy on Wednesday signed an agreement, confirming their support for the Trans Adriatic Pipeline (TAP), one of two projects in competition to reduce EU dependence on Russian energy.

"There will be 10 billion cubic metres of gas available from Shah Deniz phase II. In that context, there can't be two large-scale pipelines built at the same time," TAP External Affairs Director Michael Hoffmann told Reuters.

"But we can have two pipelines in a sequential situation. It will only be a matter of time before more gas comes on stream from Azerbaijan, though this may possibly take another five to 10 years."

TAP is proposing a route through Albania and Greece into Italy, while the rival Nabucco West project would ship gas along a different path from Turkey's western border into a hub in Austria from whence it could be distributed.

Heavily indebted nation Greece is particularly in need of the kind of investment an energy pipeline would bring and Greek Prime Minister Antonis Samaras attended Wednesday's signing ceremony in Athens.

Turkey soon to finalise $4 billion air defence procurement

Ümit ENGINSOY      Hürriyet Daily News

Turkey looks to quicken its pace in selecting a $4 billion air defense bid winner after fire from Syrian forces brought down one of its warplanes last week.

Turkey’s highest defense procurement body is expected to select the winner in a $4 billion competition to select the country’s first long-range anti-air and anti-missile defense systems soon, following the downing of a Turkish jet by Syria.

The Defense Industry Executive Committee, whose members include Prime Minister Recep Tayyip Erdoğan, Defense Minister İsmet Yılmaz, Chief of the Turkish General Staff Gen. Necdet Özel and procurement chief Murad Bayar, is set to meet in July. The meeting was expected on July 4, but it was later delayed indefinitely.

Competitors in Turkey’s long-range air-missile systems include U.S. partners Raytheon and Lockheed Martin with their Patriot-based system; Eurosam with its SAMP/T Aster 30; Russia’s Rosoboronexport, marketing the country’s S-300 and S-400 systems; and China’s CPMIEC (China Precision Machinery Import and Export Corporation), offering its HQ-9. Eurosam’s shareholders include MBDA – jointly owned by British BAE Systems, Italian Finmeccanica and pan-European EADS – and France’s Thales. These companies will work with Turkish partners.

The contest comes less than a month after a Turkish RF-4E reconnaissance fighter was shot down by Syria. The Syrian Foreign Ministry said the plane had been hit by a barrage of short-range anti-aircraft machine-gun fire, but Turkish officials said the attack did not bear the traces of anti-aircraft fire. They instead said it had no traces, suggesting that the aircraft might possibly have been hit by a Russian missile defense system. This was not confirmed.