GAZPROM INTENDS TO BUY BAKU-TBILISI-CEYHAN PIPELINE
10 September, 2010
GAZPROM INTENDS TO BUY BAKU-TBILISI-CEYHAN PIPELINE

The European Union is planning to build the Nabucco gas pipeline - Europe's energy security demand - which is to diversify the supply of raw material for European Union countries. EU countries remember past cold, severe winter pretty well, without gas and electricity. Russia is left out of the huge project of the Nabucco and feels confused as it always prefers to be a playmaker rather than a mere spectator.

Nabucco Gas Pipeline International GmbH (NIC) was set up on 24

June, 2004 to develop, construct and operate the Nabucco pipeline. With its headquartered in Vienna, it is defined as an unbundled midstream-company under EU law. NIC is owned by the Nabucco shareholders and is responsible for the development, construction, operation and capacity trading and allocation of Nabucco pipeline. NIC will be the only company in direct contact with the shippers and will offer a one-stop-shop solution, operating as an independent economic entity in the market, and acting independently from its parent companies. The pipeline system will be constructed by the National Nabucco Companies (NNCs), which are subsidiaries of NIC in each of the transit countries.

The Nabucco shareholders are: Bulgarian Energy Holding (Bulgaria), Botas (Turkey), MOL (Hungary), OMV (Austria), RWE (Germany) and Transgaz (Romania). Each shareholder holds an equal share of 16.67% of Nabucco Gas Pipeline International GmbH. The shareholders are responsible for negotiating the gas supply contracts.

Last week the President of Russia was hosted by the President of Azerbaijan, Ilham Aliyev. Numbers of issues were discussed and agreements reached during the negotiations. Russian Gazprom and Azerbaijani State Oil Company contracted that Azerbaijani gas transportation to Russia will be considerably increased. The two Presidents discussed the Nagorno-Karabakh problem as well and held a joint press conference later.

'Today is�a remarkable day in the history of Russia and Azerbaijan. Important documents in political and economical fields were signed. This is the mark of the dynamic and effective development of our relationship', Aliyev said. 'We especially appreciate that the President of Russia, the leader of the great country, has visited Azerbaijan three times in recent three years. I frequently visit Russia as well and it is the sign of mutual interests that we express to each other', the President of Azerbaijan added.

Has the above stated "frequent visits" to do anything with the Baku-Tbilisi-Ceyhan pipeline? The only answer seems to be obvious and simple - YES! After the Aliyev-Medvedev meeting most of the European media agencies reported that Russian Gazprom intended to buy the Baku-Tbilisi-Ceyhan pipeline.  Moreover, Alexey Miller, Head of the Russian Concern, officially declared: 'Gazprom is interested in buying of BP shares in Azerbaijan'.

BP is a Baku-Tbilisi-Ceyhan (BTC) pipeline operator, which alone in the post-Soviet space pumps Caspian oil from Azerbaijan and transports it through Georgia to the port of Ceyhan, Turkey.

Every year the BTC pipeline pumps about 35 million tons of oil, or 1% of the world production.  BP is the operator of the Trans-Caspian gas pipeline which pumps Azeri gas through Georgia to Erzurum, Turkey.

Meanwhile, European media reports that Nabucco gas pipeline will receive a credit of 4 billion Euros. 'A mandate letter has been signed on 6 September by the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the International Financial Corporation (IFC) - a member of the World Bank Group - the shareholders of Nabucco and NABUCCO Gas Pipeline International GmbH. The signing of the mandate letter by the three International Financial Institutions (IFIs) marks the start of the appraisal process of the Nabucco project, a required step towards a potential financing package of up to EUR 4 billion. The Nabucco gas pipeline project is the flagship project for meeting future EU gas demand and will diversify Europe's pool of supplier countries', the Nabucco gas pipeline's official web-site informs.

The total cost of Nabucco project was estimated at 8 billion Euros. The construction of the Nabucco gas pipeline is to start in 2012 and its launch is planned by 2015. Nabucco is regarded as a main alternative of the Russian South Stream pipeline.

So, to purchase the BP shares in Azerbaijan remains the only shortcut for Russia to be involved in Trans-Caspian gas pipeline project.

Therefore, all these make Azeri-Russian "frequent meetings" suspicious.

 

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