Turkey Wants Share in New Adriatic Pipeline From Azerbaijan To Greece And Italy

 @David_Kashi
on September 02 2013 3:51 PM
Trans Adriatic Pipeline
Italy's Prime Minister Enrico Letta shows the map of the Trans Adriatic Pipeline during a news conference during a European Union leaders summit in Brussels June 28, 2013. European leaders agreed on new steps to fight youth unemployment and promote lending to credit-starved small business on Thursday after deals on banking resolution and the long-term EU budget gave their summit a much needed lift. REUTERS/Laurent Dubrule

Turkey plans to buy a share of the Adriatic Pipeline (TAP) project using its state pipeline company, Botas, the minister of energy and natural resources old the Sabah newspaper Monday.

"Earlier TAP Consortium proposed to Botas a 15 percent share in the project. Now we intend to consider the proposal again,” Minister Taner Yildiz said.

The new pipeline project will bring natural gas from Azerbaijan to southern Italy and on to Western European markets.

Competing with the TAP pipeline was the proposed Nabucco venture, which was designed to carry natural gas over 2,050 miles from Turkey to Austria to reduce Europe’s dependence on Russia. The major shareowners of the Shah Deniz consortium, the largest offshore gas field in the Caspian Sea off Azerbaijan, decided to move ahead with TAP in June.

Azerbaijan used to rely on Russia to move its natural gas out of the Caspian Sea and on to markets. But, new pipelines have helped the country move the resource out to Europe directly.

TAP and other "southern corridor" pipelines are seen as a way for Europe to reduce its dependence on Russia’s control over natural gas.

Yaldiz said that there is still interest in the Nabucco pipeline project because of its importance in moving natural gas to Europe through Turkey.

An energy expert told the International Business Times in an interview that TAP might not be the most efficient route for the main shareholders, BP plc (ADR) (NYSE:BP) and Statoil ASA(ADR) (NYSE:STO).

Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution in Washington, voiced concern with BP’s decision to go along with TAP because of economic instability in Greece, Albania and Italy, which are all on the route.

“The concern …  is that you have three countries, Greece,  Albania and Italy where consumers often do not pay their natural gas or other bills, they have huge rates of consumer defaults,” Ebinger said.

However, Ebinger did say the energy giant probably feels that there are enough “industrial off-takers” along the route that are “creditworthy.”

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