One of the longest-running energy infrastructure sagas in recent history has finally reached its conclusion after the BP-led consortium that operates the giant Shah Deniz field offshore Azerbaijan snubbed the Nabucco West pipeline in favor of the rival Trans Adriatic Pipeline (TAP) as its option of choice for delivery of its gas to Europe.
OMV -- the lead partner in Nabucco West -- broke the news Wednesday, days before a deadline of the end of June imposed by BP and its Shah Deniz partners earlier this year.
"The Nabucco West project was not selected by the consortium," OMV said in a short statement.
OMV did not add any further details, but Nabucco's non-selection implies that rival pipeline TAP was chosen by the Shah Deniz group.
BP, when contacted by Platts Wednesday, said only it was sticking to the end-June timeframe for now, while TAP had no immediate comment.
Nabucco and TAP submitted their initial gas transportation offers to the Shah Deniz consortium in April this year.
Two other planned pipeline projects had already been rejected by Shah Deniz, leaving just Nabucco and TAP as the options on the table.
"While OMV accepts the decision of the consortium, OMV is of the opinion that the offer which was submitted by Nabucco met all the selection criteria and was highly competitive," it said
10 BCM/YEAR
Phase 2 of the Shah Deniz project aims to bring 16 billion cubic meters/year to market, of which 6 Bcm/year will go to Turkey and 10 Bcm/year to Europe.
First gas is due in 2018 in Turkey and in Europe in 2019.
Nabucco had originally been intended to source gas from elsewhere in the Caspian region and the Middle East, but with the creation by Azerbaijan and Turkey of the TANAP line across Turkey, the Nabucco partners opted to shorten their route to start at the Bulgaria-Turkey border.
Despite that setback, Nabucco was still confident its project was superior to TAP.
The route would have taken Azeri gas through the countries represented by the shareholders, namely Austria's OMV, Hungary's MOL, Romania's Transgaz, Bulgarian Energy Holding and Turkey's Botas.
OMV earlier this year bought the stake held by Germany's RWE and had planned to sell on that stake to a new partner.
RWE joined in February 2008, but is in talks with OMV on selling its equal stake, uncertain of the economic benefit of being a consortium member.
Hungary has also complained about the viability of Nabucco.
TAP, whose shareholders are Switzerland's EGL (42.5%), Norway's Statoil (42.5%) and Germany's E.ON Ruhrgas (15%), would take gas from the border with Turkey via Greece and Albania to Italy.
