U.S. Acknowledges Shifting Dynamics in Southern Corridor
The viability of the original concept of the Nabucco gas pipeline project firmly seems to have receded into the twilight.
Nabucco's initial vision was a 3,900 kilometer-long pipeline hosting a capacity of 31 billion cubic meters, running from the eastern Turkish border through to the Baumgarten hub in Austria.
As late as last December, Richard Morningstar, U.S. special envoy for Eurasian energy, had called it the ‘preferable’ option to transport Caspian gas to European markets.
However, an agreement between Turkey and Azerbaijan on the development of Trans-Anatolian gas pipeline project (TANAP) to carry the gas across Turkey, effectively made Nabucco's original project redundant.
Speaking at a conference in Brussels Forum this weekend, Morningstar continued to move away from solution that is “Nabucco-centric.”
Morningstar said that "like any pipeline, Nabucco has to be commercially viable. And I think it’s become apparent that, at least in the first instance, that there is not enough gas to fill a full Nabucco pipeline"
The Ambassador’s comments are reflective of the swing in political and industry momentum away from open support for Nabucco, towards a more generic solution for the development of the Southern Gas Corridor based upon the available gas coming on stream in the near term from the Shah Deniz project in the Azerbaijani area of the Caspian basin.
The Nabucco consortium has come back to the table with a new proposal dubbed “Nabucco West,” which would see a pipeline between Bulgaria and Austria with a reduced capacity approximately half of what was originally planned.
Vice president of BP's Shah Deniz development Al Cook has said that the smaller-scale Nabucco West project was a "big step forward."
The Trans-Adriatic Pipeline (TAP) project together with the South East European Pipeline (SEEP), continue to vie with the re-made Nabucco West proposal as the preferred project to move Caspian gas to European markets.
On February 20th, the Shah Deniz consortium excluded the Interconnector Turkey-Greece-Italy (ITGI) project from those being considered to carry its gas to Europe.