RWE Executive: More Than Enough Gas To Fill Nabucco, No Downsizing Pipeline
April 13 2011 - 7:30AM
Dow Jones News
There's more than enough natural gas to fill the Nabucco
pipeline that is expected to transport gas from the Caspian and
Middle Eastern regions to central Europe through Turkey, and the
consortium doesn't consider downsizing the project, one of the
venture's partners said.
"We're talking about an excess of 80 billion cubic meters per
year from Azerbaijan, Turkmenistan and Iraq", the Nabucco
pipeline's most likely initial supplier countries, Jeremy Ellis,
head of business development at RWE AG's (RWE.XE) Supply and
Trading unit, told Dow Jones Newswires in an interview late
Tuesday.
"Egypt has also recently expressed publicly an interest to
participate," Ellis added.
His comments come in response to recent statements by BP PLC's
(BP) chief executive for refining and marketing, Iain Conn, who
said at a conference last month that the U.K. oil major prefers
smaller pipelines to the 31 bcm Nabucco project due to a lack of
gas in the Caspian region.
"The question raised by BP that there isn't enough gas to fill a
pipeline the size of Nabucco is fundamentally wrong," said RWE's
Ellis.
He added that Nabucco's challenge isn't availability of gas but
aligning the timing of gas supply interests from various potential
producing countries in the Caspian region and the Middle East.
Nabucco seeks to secure gas supplies from Azerbaijan,
Turkmenistan and Iraq and talks with producers there are ongoing,
RWE's Ellis said. However, market observers have said the biggest
weak point of Nabucco to date is that the project has yet to secure
gas supplies to fill the pipeline.
One possible source for Nabucco is BP and Statoil ASA (STO) led
Shah Deniz II, the second development stage of an offshore gas
field in Azerbaijan. However, that particular gas field isn't
expected produce gas before 2017 and Nabucco is competing for Shah
Deniz II gas with at least two other pipeline projects - the Trans
Adriatic Pipeline and the Interconnector Turkey Greece Italy, known
as ITGI.
However, Ellis remains confident, saying that the "first gas
from Nabucco will likely be in 2017, driven predominantly by the
start of production of Shah Deniz II."
He added that talks with Turkmenistan and Iraq are also
proceeding and both countries are "working hard towards a timetable
to supply gas between 2017 and 2020".
"The supply picture is firming and forming," Ellis said.
-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503;
jan.hromadko@dowjones.com
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