By SELINA WILLIAMS
LONDON -- The BP-led Shah Deniz consortium said it has begun
evaluating binding transportation offers from two pipeline
consortiums vying to carry natural gas from the giant
offshore Shah Deniz gas field in Azerbaijan into Europe.
The announcement represents another milestone for the BP-led
Shah Deniz project
, ahead of a final
investment decision expected by the end of this year, and
will have major consequences for the region's energy policy
by helping to diversify Europe
's gas supplies away from
dependence on Russia.
Total investment in the development of the second phase of
the Shah Deniz gas field and all the pipelines to ship the
gas into Europe
is estimated at around $40
billion. The estimate includes around $25 billion for the
upstream portion of the project
The Trans Adriatic Pipeline (TAP) and rival consortium
Nabucco Gas Pipeline
International have competed for years to be selected by the
companies developing the Shah Deniz II gas field.
The Shah Deniz consortium, which includes Statoil and Socar,
is expected to reach a decision on the pipeline by the end of
Nabucco Gas Pipeline International and TAP have been in
extensive negotiations with the Shah Deniz consortium
following delivery of their initial gas transportation offers
at the end of March 2013.
Those offers have now been approved by their shareholders and
have become final and binding, BP said in a statement.
The Shah Deniz consortium has also received gas sales offers
for more than 30 Bcm of gas a year from more than 15
different gas buyers across Europe. The gas sales offers will
be considered alongside the transportation offers to
determine the commerciality of the pipeline options and the
Nabucco Gas Pipeline International and TAP are offering to
carry 10 Bcm a year of gas to different markets in central
and southern Europe
. The Shah Deniz consortium
is currently finalizing its assessment of these offers.
Dow Jones Newswires