Azeri gas consortium rejects Nabucco pipeline | Business| Economy and finance news from a German perspective | DW | 26.06.2013
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Azeri gas consortium rejects Nabucco pipeline

A consortium developing a huge new gas field in Azerbaijan has decided not to use the planned Nabucco pipeline for transports to Europe. It has opted instead for what it thinks is a cheaper rival project.

Developers in Azerbaijan on Wednesday turned down a bid by the Nabucco pipeline project to transport their gas to Europe. Austrian energy group and Nabucco shareholder OMV said the gas producers' consortium had chosen the rival Trans Adriatic Pipeline (TAP) project for its transport requirements.

It said TAP would ship the gas through Greece and Italy, rather than via Nabucco's longer and allegedly costlier Balkan route.

The TAP project is budgeted at 1.5 billion euros ($1.98 billion). By contrast, Nabucco was originally planned to cost almost eight billion euros, but the pipeline's route through Turkey had been cut, shortening its total length by more than a half.

Strategic considerations

OMV said it accepted the developers' decision, but was unclear about how it came about. “We believe that the offer which was submitted met all the criteria and was highly competitive,” the Austrian investor said.

The rejection of Nabucco also was bad news for co-shareholders Botas of Turkey, the Bulgarian Energy Holding, Transgaz in Romania, Mol in Hungary and GDF Suez in France.

The owners of the Nabucco project had long been dogged by planning problems and had therefore attempted to breathe new life into the scheme by shortening the original route. Either route would have achieved the primary objective of reducing Europe's dependence on gas from Russia.

hg/dr (AFP, dpa)