May, 2011 - The Nabucco pipeline consortium is not facing a shortage of natural gas supplies and does not intend to downsize, a partner said Tuesday in response to doubts of the project’s viability expressed by BP analysts.
An executive of German natural gas and power distributor RWE said Nabucco, which is projected to go onstream in 2017 has more potential gas supplies than it can handle.
"We're talking about an excess of 80 billion cubic meters per year from Azerbaijan, Turkmenistan and Iraq," the likely initial suppliers of the pipeline, RWE’s business development chief Jeremy Ellis told the Dow Jones news agency.
The pipeline is being designed to pump up to 31 billion cubic meters (bcm) of gas annually from the Caspian region and Middle East across Turkey and into Europe.
"Egypt has also recently expressed publicly an interest to participate," he added.
Last month, BP official Iain Conn said that British oil companies prefer smaller capacity pipelines than Nabucco because the Caspian region does not have enough natural gas to provide Europe’s needs.
"The question raised by BP that there isn't enough gas to fill a pipeline the size of Nabucco is fundamentally wrong," Ellis said
He noted that the consortium is negotiating with potential suppliers Turkmenistan, Azerbaijan and Iraq.
Securing gas is not the challenge so much as coordinating the timing of gas supply from producer countries, Ellis said.
The RWE executive said Nabucco’s first gas will be supplied in 2017 from the offshore Azeri gas field Shah Deniz II, led by BP and Statoil.
Shah Deniz II is only expected to produce 10 bcm of gas per year and that two other pipelines are competing for its output, the news agency noted.
Ellis told the news agency that Turkmenistan and Iraq are “working hard toward a timetable to supply gas between 2017 and 2020.”
But industry expert Jennifer Coolidge has noted that Turkmenistan and Iraq are unlikely to provide large-scale supplies in the near future.
Turkmenistan, which has the world’s fourth largest reserves of natural gas, currently lacks the export infrastructure and “the ability to produce the incremental gas needed to supply Europe,” the news agency reported Coolidge, executive director CMX Caspian and Gulf Consultants, as saying.
Iraq’s gas production is taking second place to its focus on re-electrifying the country, she added.
Ellis said that the consortium has offered to stretch the Nabucco pipeline to Azerbaijan’s capital Baku.
This would give Azerbaijan and Turkmenistan the added bonus of developing their upstream gas industries and provide the two with more choices in consumers for Caspian gas, the RWE executive said....