By Alkman Granitsas and Alessandro Torello
ATHENS--The two pipeline projects vying to transport
Azerbaijan's natural gas to Europe are gearing up for the last
stage of a long battle, promoting their plans just months before a
decision that will have major consequences for the region's energy
policy.
The Trans Adriatic Pipeline AG, or TAP, and rival Austria-based
consortium Nabucco Gas Pipeline International GmbH have competed
for years to be selected by the companies developing the giant
offshore Shah Deniz II gas field in Azerbaijan to carry that gas to
the European Union. The winning pipeline would help to diversify
Europe's supplies away from dependence on Russian gas.
Kjetil Tungland, TAP's managing director, is increasingly
optimistic that his EUR2.5 billion pipeline will get the nod when
the Shah Deniz consortium decides on the winning bidder in just
over two months.
TAP is no longer the underdog to Nabucco, Mr. Tungland said. A
fresh commitment of support this month by countries most directly
involved in TAP--Greece, Italy and Albania--and a change in policy
stance by the European Commission have boosted TAP's prospects, he
said.
"I think the odds are highly in our favor because we were more
in front technically and commercially all the time, but politically
we had to catch up," Mr. Tungland said.
Final submissions for the pipeline tender--after years of
delay--are now set for the end of March. The Shah Deniz
consortium--in which BP PLC (BP), Norwegian state oil company
Statoil ASA (STO) and Azerbaijan's Socar are the main players--is
expected to reach an initial decision in June and a final deal by
October. Socar officials declined to comment on whether they were
leaning toward one project or the other.
Nabucco, long seen as the favorite, has recently faced
challenges. German utility RWE AG has quit the project, while the
consortium was forced to almost halve the capacity of its project
and reduce the route to 1,300 kilometers from nearly 4,000
kilometers. The newly dubbed Nabucco West project would now run
from Turkey's western border to Baumgarten, Austria.
The European Commission had for years thrown its weight behind
Nabucco, a consortium of European Union companies including
Austria's OMV Gas and Power GmbH (OMV.VI), Hungary's MOL Nyrt
(MOL.BU), Bulgaria's state-owned energy holding company and
Romanian state-run pipeline operator Transgaz Medias (TGN.RO). Now,
however, the Commission says it has no preference for either
project.
Nabucco still believes it has a good chance of winning the
competition. "We offer the best comprehensive package," said
Christian Dolezal, spokesman for the Nabucco consortium. "Nabucco
countries have all concluded legislation steps to make our project
the priority project" and "there is a lot of willingness in these
countries to politically support us," he said.
Write to Alkman Granitsas at alkman.granitsas@dowjones.com and
Alessandro Torello at alessandro.torello@dowjones.com
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