* BP, Statoil lead development of Shah Deniz II gas field
* Plans call for flows to Europe from 2019
* Nabucco West pipeline not chosen, OMV says
* Official announcement awarding project to TAP expected
* TAP project will cross Greece, Albania
By Georgina Prodhan and Karolin Schaps
VIENNA/LONDON, June 26 The group developing
Azerbaijan's vast gas reserves has chosen the Trans Adriatic
Pipeline (TAP) via Greece to link to Europe, officials said on
Wednesday, defeating the Nabucco West consortium which had
backed a route to Austria.
The project, first envisioned more than a decade ago,
reflects a European Union push for alternatives to Russian gas
imports and is expected to start flowing in 2019.
The leading company in Nabucco West, Austria's OMV
, said it had been told that higher gas prices in
Greece and Italy had tipped the decision in favour of TAP.
"The Nabucco project is over for us," OMV Chief Executive
Gerhard Roiss told a news conference after the company announced
it had not been selected, putting to rest the suggestion Nabucco
could also be built eventually once more Caspian Sea gas becomes
The company said the Nabucco partners would evaluate over
the next weeks whether to build a pipeline for OMV's own gas
from the Black Sea, potentially its biggest gas find ever.
TAP is fronted by Norway's Statoil, Swiss company
AXPO and E.ON Ruhrgas of Germany.
It declined to comment ahead of an official announcement
expected on Friday but sources from companies and governments
involved said TAP had been chosen.
The TAP pipeline will collect Azeri gas in Turkey and carry
it across Greece and Albania before reaching southern Italy,
stretching 870 kilometres (540 miles).
Nabucco West was more ambitious, tracking a 1,329-kilometre
route north from Turkey to Austria via Bulgaria, Romania and
Neither group publicly announced costs, but TAP due to its
shorter route was widely considered the less expensive project.
BP, Statoil and state energy company SOCAR are
leading development of Azerbaijan's vast Shah Deniz II gas field
in the Caspian Sea, one of the world's largest.
SOCAR emerged last week as sole bidder for Greece's gas
network, a fact which analysts said helped TAP's position.
The pipeline is expected to pump 6 billion cubic metres
(bcm) of gas per year to consumers in energy-hungry Turkey and
10 bcm per year to Europe.
The EU's total annual consumption tops 400 bcm.
More than 15 companies have lined up to buy the gas, the
Shah Deniz consortium has said.
The European Union had initially favoured the Nabucco
project and then the slimmed down Nabucco West concept but in
recent months has taken a neutral stance.
"It will mean greater liquidity and greater security of
supply; the opening up of additional supply to Greece and
Italy," Philip Lowe, head of the European Commission's energy
directorate, said on Wednesday.
Europe is looking to Azeri gas to ease its dependence on
Russian supplies, which currently account for around 30 percent
of all EU gas imports. The figure rises to nearly 100 percent in
some EU states, such as Bulgaria and Lithuania.
Europe, where gas demand is projected to rise by 20 percent
by 2035, according to the International Energy Agency, also
needs to safeguard supply in the face of rising Asian buying.
Yet economic recession and more use of alternative energy
sources have dampened European demand in recent years, prompting
some experts to express concern about securing additional
In response to Europe's quest for Caspian supply, Russian
gas export monopoly Gazprom has put forth its $39
billion South Stream project which would pipe gas to northeast
Italy through the Black Sea.