Tweet
CENTRAL ASIAN DEAL PAVES WAY FOR NON-RUSSIAN GAS TO EUROPE
by Tamsin Carlisle
The National
June 7 2010
UAE
Turkey and Azerbaijan have signed a long-awaited natural gas deal,
opening the way for the first Central Asian gas exports to Europe.
The memorandum of understanding signed earlier today on the sidelines
of an energy security summit in Istanbul could be crucial in securing
early gas supplies for the proposed â~B¬7.9 billion (Dh34.65bn)
Nabucco pipeline, which aims to supply Central Asian and Middle
Eastern gas to Europe through Turkey, bypassing Russia.
The agreement also advances Ankara's plan to establish Turkey as an
energy hub for oil and gas supplies to Europe.
Under the deal, Turkey would have the right to re-export gas from
the second phase of production of the giant Shah Deniz field in the
Caspian Sea offshore Azerbaijan.
"This opens the way for the securing of supplies for projects like
Nabucco," said Taner Yildiz, the Turkish energy minister. "The signing
today will accelerate the Nabucco project."
The president of Socar, the Azeri national petroleum company, said
Azerbaijan planned to send 10 billion cubic metres per year of gas
from Shah Deniz II to Europe, starting in 2018. Another 1 billion
cubic metres per year could supply customers in Turkey.
"This is a step in the right direction," said Reinhard Mitschek,
the managing director of the Nabucco development consortium, which
is led by the Austrian petroleum group OMV.
The EU has pledged financing for the pipeline because it regards
Nabucco as strategically important in reducing Europe's dependence
on Russian gas.
Last week, the Turkish parliament ratified an intergovernmental
agreement with five EU countries on construction of the 3,300km
pipeline, which would pass through Turkey, Bulgaria, Hungary and
Romania on its way to delivering supplies to an Austrian gas hub on
the outskirts of Vienna.
Turkey and Azerbaijan have been in talks since 2008 over a gas
agreement, which was a prerequisite for the further development of
the Shah Deniz field. The second phase of the big Caspian project
was expected to underpin Azeri gas exports to Europe.
Negotiations had been complicated by Baku's strong objections to a
Turkish proposal to open its border with Armenia, with which Azerbaijan
is technically at war in a dispute over the breakaway territory of
Nagorno-Karabakh. But in April, Armenia suspended talks aimed at
establishing normal diplomatic relations with Turkey.
According to Mr Yildiz, the deal signed by the the Azeri president
Ilham Aliyev and the Turkish prime minister Recep Tayyip Erdogan
included an agreement on the price of Turkish gas imports from phase
I of Shah Deniz. That had been a sticky issue during the protracted
negotiations.
Mr Yildiz said the agreement would allow the price of the gas to be
adjusted according to market conditions, rather than being fixed.
Turkey would pay less for Azeri supplies than for Russian imports,
he added.
Nabucco is aiming to secure up to 31 billion cubic metres per year of
gas from a number of countries, but analysts and some industry sources
regard Azeri supplies as crucial to the project's viability. They could
pave the way for later supplies from other Caspian states including
Turkmenistan, which holds the world's fifth biggest gas reserves,
and from Middle Eastern producers including Iraq, Qatar and even Iran.
Ashti Hawrami, the energy minister of the semi-autonomous Kurdistan
region of Iraq, said in Istanbul today that Kurdistan was ready to
commit surplus gas supplies to Nabucco. That would depend, however,
on the region reaching an accord with Baghdad over gas exports.
Separately, Baghdad has expressed interest in supplying up to 15
billion cubic metres of gas to Nabucco from untapped fields in the
rest of Iraq.
Turkmenistan announced last month that it would soon start building
a 1,000km pipeline linking big gasfields in its eastern desert to the
Caspian Sea coast, in preparation for exports to Europe. The UAE has
expressed interest in backing the project.
Even if the Nabucco initiative fails, the Turkish-Azeri gas agreement
could bolster rival developments aimed at supplying Caspian gas to
Europe. Those include the Italy-Turkey-Greece Interconnector and the
Trans-Adriatic Pipeline projects.
The biggest rival to Nabucco, however, remains Gazprom's Southstream
project to supply Russian gas to Europe through a pipeline under
the Black Sea. Earlier today, Russia signed a deal with Greece for
construction of the â~B¬20bn pipeline.
From: A. Papazian
by Tamsin Carlisle
The National
June 7 2010
UAE
Turkey and Azerbaijan have signed a long-awaited natural gas deal,
opening the way for the first Central Asian gas exports to Europe.
The memorandum of understanding signed earlier today on the sidelines
of an energy security summit in Istanbul could be crucial in securing
early gas supplies for the proposed â~B¬7.9 billion (Dh34.65bn)
Nabucco pipeline, which aims to supply Central Asian and Middle
Eastern gas to Europe through Turkey, bypassing Russia.
The agreement also advances Ankara's plan to establish Turkey as an
energy hub for oil and gas supplies to Europe.
Under the deal, Turkey would have the right to re-export gas from
the second phase of production of the giant Shah Deniz field in the
Caspian Sea offshore Azerbaijan.
"This opens the way for the securing of supplies for projects like
Nabucco," said Taner Yildiz, the Turkish energy minister. "The signing
today will accelerate the Nabucco project."
The president of Socar, the Azeri national petroleum company, said
Azerbaijan planned to send 10 billion cubic metres per year of gas
from Shah Deniz II to Europe, starting in 2018. Another 1 billion
cubic metres per year could supply customers in Turkey.
"This is a step in the right direction," said Reinhard Mitschek,
the managing director of the Nabucco development consortium, which
is led by the Austrian petroleum group OMV.
The EU has pledged financing for the pipeline because it regards
Nabucco as strategically important in reducing Europe's dependence
on Russian gas.
Last week, the Turkish parliament ratified an intergovernmental
agreement with five EU countries on construction of the 3,300km
pipeline, which would pass through Turkey, Bulgaria, Hungary and
Romania on its way to delivering supplies to an Austrian gas hub on
the outskirts of Vienna.
Turkey and Azerbaijan have been in talks since 2008 over a gas
agreement, which was a prerequisite for the further development of
the Shah Deniz field. The second phase of the big Caspian project
was expected to underpin Azeri gas exports to Europe.
Negotiations had been complicated by Baku's strong objections to a
Turkish proposal to open its border with Armenia, with which Azerbaijan
is technically at war in a dispute over the breakaway territory of
Nagorno-Karabakh. But in April, Armenia suspended talks aimed at
establishing normal diplomatic relations with Turkey.
According to Mr Yildiz, the deal signed by the the Azeri president
Ilham Aliyev and the Turkish prime minister Recep Tayyip Erdogan
included an agreement on the price of Turkish gas imports from phase
I of Shah Deniz. That had been a sticky issue during the protracted
negotiations.
Mr Yildiz said the agreement would allow the price of the gas to be
adjusted according to market conditions, rather than being fixed.
Turkey would pay less for Azeri supplies than for Russian imports,
he added.
Nabucco is aiming to secure up to 31 billion cubic metres per year of
gas from a number of countries, but analysts and some industry sources
regard Azeri supplies as crucial to the project's viability. They could
pave the way for later supplies from other Caspian states including
Turkmenistan, which holds the world's fifth biggest gas reserves,
and from Middle Eastern producers including Iraq, Qatar and even Iran.
Ashti Hawrami, the energy minister of the semi-autonomous Kurdistan
region of Iraq, said in Istanbul today that Kurdistan was ready to
commit surplus gas supplies to Nabucco. That would depend, however,
on the region reaching an accord with Baghdad over gas exports.
Separately, Baghdad has expressed interest in supplying up to 15
billion cubic metres of gas to Nabucco from untapped fields in the
rest of Iraq.
Turkmenistan announced last month that it would soon start building
a 1,000km pipeline linking big gasfields in its eastern desert to the
Caspian Sea coast, in preparation for exports to Europe. The UAE has
expressed interest in backing the project.
Even if the Nabucco initiative fails, the Turkish-Azeri gas agreement
could bolster rival developments aimed at supplying Caspian gas to
Europe. Those include the Italy-Turkey-Greece Interconnector and the
Trans-Adriatic Pipeline projects.
The biggest rival to Nabucco, however, remains Gazprom's Southstream
project to supply Russian gas to Europe through a pipeline under
the Black Sea. Earlier today, Russia signed a deal with Greece for
construction of the â~B¬20bn pipeline.
From: A. Papazian