BP confirms more limited scope for key European natural gas pipeline


LONDON -- UK energy giant BP confirmed over the weekend that a key European pipeline project to import natural gas from Azerbaijan, called Nabucco, will be of much more limited scope than hoped and reach only Europe's border with Turkey.

BP, which operates large oil and gas fields in Azerbaijan, is no longer considering Nabucco as an option for transporting 10 billion cubic meters of gas per year to Europe, but will instead pursue two other pipeline plans backed by the state energy companies of Turkey and Azerbaijan, said Iain Conn, BP's refining and marketing chief, in a speech posted on the company's website.

Conn's comments, delivered at a Berlin conference on Thursday, come as little surprise after the Nabucco consortium, which is backed by European energy firms OMV and RWE, recently put forward a far less ambitious plan for the pipeline to run only from Austria to the Bulgarian border with Turkey.

BP is still considering this shortened pipeline, called Nabucco West, as an option for delivering Azeri gas into Europe, said Conn.

It is also looking at an option called the South East Europe Pipeline, which is backed by BP, and its partners in Azerbaijan's Shah Deniz gas field and the authorities in Bulgaria, Romania and Hungary, he said.

BP will choose one of those options in June and make the final investment decision within a year, Conn said.

These decisions mark the end of a key strategic initiative that had considerable political backing from EU and US authorities, intended to reduce Russian dominance over European gas supplies by importing gas direct from Central Asia.

Gas from Azerbaijan should still arrive in Europe under the new plan, but the level of supply BP proposes is just a third of what was planned for Nabucco.

BP's plan will still deliver, "competitive energy supply [that] can underpin European competitive advantage," Conn said.

Dow Jones Newswires

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