Iraq "Most Real" Supplier to Nabucco
The Nabucco natural-gas pipeline venture sees Iraq as the “most real” supplier for the link designed to ship fuel from the Caspian Sea to Europe.
Iraq is bigger and less dependent on Russia than Turkmenistan or Azerbaijan, Head of Corporate Affairs Dimitar Abadjiev told reporters in Bucharest today. “That’s why I expect to have the first gas from Iraq,” he said.
The 7.9 billion-euro ($10.8 billion) pipeline is designed to carry gas more than 3,300 kilometers (2,050 miles) from Turkey to Austria to reduce Europe’s dependence on Russia. The venture on September 6th said it may get as much as 4 billion euros in loans from the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank.
The World Bank, EBRD and EIB are scheduled to make an announcement on financing in the second half of 2011, Abadjiev said. Construction will start immediately after, he said.
Nabucco must consider using Iranian gas in the link, Turkey’s Energy Minister Taner Yildiz said today in Istanbul. If the venture is a commercial one, then the origin of gas shouldn’t matter, he said.
The venture said in August that it plans feeder pipelines from Georgia and Iraq and has decided against a link to the country’s border with Iran “due to the current political situation.”
The pipeline is in preliminary talks with Iraqi authorities via RWE AG, which is among Nabucco’s shareholders, Abadjiev said. It also is in talks with Egypt, he said.
RWE, Germany’s second-largest utility, in August signed a cooperation agreement with the Kurdistan Regional Government to help develop the Iraqi region’s gas distribution network.
“Before any export, our gas will be used to meet the needs of the people of the Kurdistan region and neighboring areas,” KRG Prime Minister Barham Salih said in an Aug. 26 statement posted on the regional government’s website.
The Iraqi Oil Ministry responded with a statement on its website “stressing that Iraq is exporting crude oil and gas through the Iraqi oil marketing company exclusively and there is not any other party authorized to sign contracts with international companies.”
Shah Deniz
“When it comes to exports of gas, Iraq is one Iraq,” Ashti Hawrami, minister of natural resources for KRG, said in an interview in Istanbul today. “There will be no problem with regard to Kurdish region exporting gas” to Nabucco.
Nabucco shareholders Mol Nyrt. of Hungary and Austria’s OMV AG each bought a 10 percent stake in Dana Gas PJSC’s Iraqi unit, Pearl Petroleum, in May 2009 as part of a plan to supply the pipeline.
Nabucco expects to get 10 billion cubic meters from Iraq and 8 billion cubic meters from Azerbaijan’s Shah Deniz field, Abadjiev said.
He is “optimistic” that negotiations with Shah Deniz will be fruitful, as it has an interest in diversification and in having access to European markets, Abadjiev said.
“This isn’t only a question of price,” he said, adding that Russia was betting on price in regard to Shah Deniz.
Negotiations with Shah Deniz will start in November, at the same time as the venture commences the so-called “open season,” which the project’s planners will use to gauge interest in gas supplies from potential customers.
Nabucco partners, which also include Bulgargaz EAD, Romania’s Transgaz SA and Ankara-based Botas, will decide on the investment next year.
Source: Bloomberg