Nabucco and TAP gas pipelines could both be built one day -TAP

Wed Feb 13, 2013 2:42pm EST

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* Second pipeline could take another five-to-10 years

* Decision on winning project expected by mid-2013

BRUSSELS Feb 13 (Reuters) - Both of the projects vying to pipe Azeri gas to the European Union can be built but not yet, a senior official from one of them said on Wednesday.

The governments of Albania, Greece and Italy on Wednesday signed an agreement, confirming their support for the Trans Adriatic Pipeline (TAP), one of two projects in competition to reduce EU dependence on Russian energy.

"There will be 10 billion cubic metres of gas available from Shah Deniz phase II. In that context, there can't be two large-scale pipelines built at the same time," TAP External Affairs Director Michael Hoffmann told Reuters.

"But we can have two pipelines in a sequential situation. It will only be a matter of time before more gas comes on stream from Azerbaijan, though this may possibly take another five to 10 years."

TAP is proposing a route through Albania and Greece into Italy, while the rival Nabucco West project would ship gas along a different path from Turkey's western border into a hub in Austria from whence it could be distributed.

Heavily indebted nation Greece is particularly in need of the kind of investment an energy pipeline would bring and Greek Prime Minister Antonis Samaras attended Wednesday's signing ceremony in Athens.

The European Commission is project-neutral, saying its only concern is that a route, which it refers to as the Southern Gas Corridor, will be opened up to make EU supplies more secure and diversified by providing a link to the Caspian region.

European Commissioner Guenther Oettinger in a statement welcomed the signing of Wednesday's intergovernmental agreement as "an essential step".

TAP's shareholders are Swiss energy company Axpo (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

Its rival Nabucco West includes Austria's OMV, Hungary's MOL, Turkey's Botas and Romania's Transgaz .

The Shah Deniz consortium, which comprises BP, Statoil, Azeri energy company SOCAR and Total, has a 50-percent equity option in both rival projects. It is expected to choose one of the two pipeline contenders by mid-2013.

Greece, Italy and Albania had signed a preliminary agreement to back TAP in September last year.

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