BP Plans Europe Gas Pipeline

Wednesday, September 28, 2011 @ 04:09 PM gHale

BP is looking at building a pipeline to transport gas from Azerbaijan to Central Europe.

BP and its partners in the Shah Deniz II field — Norway’s Statoil and Azeri state oil company Socar — could build a pipeline from Turkey to the Romanian-Hungarian border, said a BP spokesman.

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The pipeline would transport 10 billion cubic meters (BCM) of gas per year which Azerbaijan’s government said would then be able to sell into European markets.

The proposal to build the South-East Europe Pipeline (SEEP), which BP first unveiled at a conference in Baku last week, comes despite the fact BP invited three consortia to submit bids on October 1 to build a pipeline for the gas.

The three groups competing to build the infrastructure to carry Shah Deniz II gas to Europe are Nabucco, Trans Adriatic Pipeline (TAP) and Interconnector Greece-Italy (IGI) Poseidon.

Nabucco, backed by Austrian energy company OMV, German utility RWE and Hungarian oil group MOL, is the most ambitious of the three projects, aiming to transport up to 31 BCM a year, but its size means it needs additional supplies to be commercially viable.

TAP, supported by Germany’s E.ON Ruhrgas and Swiss EGL, and Poseidon, backed by Italian utility Edison and state-controlled Greek utility DEPA, both need to secure agreements and permits.

Richard Tawse, head of finance at BP Azerbaijan, told the Baku conference last week the aim of SEEP was to ensure a viable export option existed.

“Without competitive pipeline offers, the sale of Shah Deniz gas to distant European markets would prove uncommercial,” he said.

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