Nabucco Offers Shah Deniz 50% Stake

The companies sponsoring the Nabucco pipeline have agreed to give Azerbaijan's Shah Deniz gas group a stake in the pipeline, boosting its prospects against the rival Trans-Adriatic (TAP) project.

The Shah Deniz II consortium, which has already signed a funding deal with the rival TAP, has said its acquisition of a stake would be critical for the Nabucco project to go ahead.

TAP plans to pipe Azeri gas to Italy while Nabucco will transport Caspian supplies to Europe.

Today's news reported by newsagencies confirmed earlier speculation that Nabucco would give Shah Deniz a stake.

Under the deal, announced in the Bulgarian capital, Sofia, and to be finalised in Vienna, the Shah Deniz group is offered a 50% stake if it chooses the pipeline as its European export route, Nabucco said. At the Nabucco meeting a starting date for construction in Bulgaria was also announced, for the middle of this year.

"With real upstream people as partners, we move in the direction of developing more than just something on a paper, but into direction of a real pipeline," said Gerhard Roiss, chief executive of Austria's OMV, one of the shareholders in Nabucco.

However Nabucco spokesman Christian Dolezal said there was still “a lot to negotiate”, according to Bloomberg. 

The Shah Deniz consortium includes BP, Statoil, Total SA (FP) and Socar, the Azerbaijani oil and gas company. In June it selected the Nabucco West pipeline as a potential export route to Europe. Today it agreed in principle with Nabucco shareholders on joint funding development costs againstthe 50% stake. 

“It’s important that we have an agreement that will lead to a final decision in June 2013,” Dolezal said. “We still have a lot to negotiate with the Shaz Deniz consortium partners to align everything in terms of the final decision.”