Italy's Edison says ITGI Better Positioned Than Nabucco

Edison SpA, Italy’s second-biggest power producer, say that its Interconnection Turkey Greece Italy, or ITGI pipeline project is in a better position to compete for gas from Azerbaijan than the rival Nabucco development. ITGI is being developed with Greek utility Depa SA and Turkey’s pipeline company Botas to carry Azeri gas to Italy through Turkey and Greece.

“In the long run ITGI and Nabucco are complimentary projects, but they will compete to get 8 billion cubic meters of Azeri gas from 2016 or 2017,” said Executive Vice President Roberto Poti.

Demand for Nabucco’s gas may be crimped by Germany’s decision to extend operations of nuclear power plants by an average 12 years as well as Hungarian shale gas output, he said.

“Therefore there are more concerns about the guarantee for the volume of gas to be purchased” by Nabucco, he said. “Germany won’t build gas-fired power plants any longer.”

It’s easier to provide a guarantee for gas for ITGI than Nabucco, he said. The link will carry 8 billion to 9 billion cubic meters to Italy and 2 billion to 3 billion cubic meters to Greece annually. It will use Turkey’s existing lines and build two lines through Greece and the Adriatic Sea for less than 1 billion euros, Poti said.

“ITGI will definitely have much less gas transit costs than Nabucco.” ITGI will be built after securing Azeri gas, he said.

Source: Bloomberg