Nabucco Pipeline Consortium Considers Merging with Competing Trans-Anatolia Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--Nabucco Gas Pipeline International GmbH (Vienna, Austria) is considering merging the proposed natural gas pipeline with the Trans-Anatolia (Tanap) pipeline project. Reinhard Mitschek, the managing director of Nabucco Gas Pipeline International, said that the company will make a decision on combining two projects next year.

"The point of no return is a final investment decision that will not be this year and will most likely be next year. That is something we are working on in a very concentrated and focused form within the Nabucco group," Mitschek told reporters at a petroleum conference in Ankara. The Trans-Anatolia Pipeline is a venture between Turkey's BOTAS and State Oil Company of Azerbaijan (Socar), to carry gas to the southern border of the EU.

The Nabucco pipeline will become operational in 2017 and will carry the Caspian gas to Austria. With a projected 31 billion cubic meters of annual shipping capacity, the Nabucco pipeline project is strongly backed by the European Commission, the EU's governing body. The EU wants to diversify its sources of natural gas and decrease its dependence on Russian natural gas. In 2011, Russia moved about 150 billion cubic meters of gas to Europe via gas pipelines, accounting for about 25% of Europe's gas needs. About 80% of this amount goes across Ukraine territory.

Energy experts criticized the Nabucco project for its size and its costs of at least $10 billion--far more than other leading pipelines that target Caspian gas. The Nabucco pipeline is a joint venture of RWE AG (PINK:RWEOY) (Essen, Germany); OMV AG (PINK:OMVKY) (Vienna, Austria); Mol Nyrt (PINK:MGYOY) (Budapest, Hungary); Bulgargaz SA (Sofia,Bulgaria); Transgaz SA (BVB:TGN) (Sibiu, Romania); and BOTAS (Ankara,Turkey).

"Nabucco West pipeline is still in discussion and can be succesful," Nabucco's Mitschek said. He also added that Nabucco is open to suitable partners after technical and commercial feasibility studies. The Nabucco West pipeline is a smaller version of the Nabucco project, which may go from Turkey's west border, where the Tanap ends, to Bulgaria, Romania, Hungary and Austria. "We want to add new natural gas sources to Nabucco, from Azerbaijan, Iraq and Turkmenistan," Mitschek said.

British oil giant BP plc (NYSE:BP) (London, England) and its partners in the Caspian Sea Shah Deniz gas field plan to make a final decision on an export route to Europe by the middle of 2013. The group will choose between the Nabucco project and the South-East Europe Pipeline, by the middle of this year.

The Trans-Adriatic Pipeline, or TAP, and the Interconnector Turkey-Greece-Italy, or ITGI, are also planning to carry gas from the Caspian region to Europe.

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