Industry and Energy

Industry and Energy

Richard Morningstar: Initial gas for Nabucco pipeline will come from Azerbaijan - EXCLUSIVE

Richard Morningstar: Initial gas for Nabucco pipeline will come from Azerbaijan - <font color=red>EXCLUSIVE</font>

24 June 2009 08:28 (UTC +04:00)

-After visiting Azerbaijan, Turkmenistan and Turkey what are your thoughts about the main impediments for development of the Southern Energy Corridor?

-Certain issues should be worked out in respect to various agreements among the countries involved to the mentioned project. Turkey works with EU with the respect of intergovernmental agreement in connection with Nabucco. We believe that progress has been made in the respect to that agreement. At the same time, Turkey and Azerbaijan should work out the agreement in respect to gas pricing, transit issues thru Turkey. It is a prerequisite for the Southern Corridor to develop at least thru Turkey and I think that during last several weeks the progress has been made at that area. I donâ€™t think that the agreement is final but progress has been made and we hope that in not so distant future the agreement will be there.

Turkmenistan is very interesting country and raises very interesting opportunities. Their Foreign Minister Mr. Meredov is in Washington right now. I was in two meetings with him this morning. There is flexibility in the part of Turkmenistan with respect to doing more onshore production with the western companies in the way it will be satisfactory to both the government of Turkmenistan and foreign companies. There are possibilities getting gas across the Caspian and the relationship between Azerbaijanâ€™s president Aliyev and Turkmenistanâ€™s president Berdimuhamedov has been growing and positive. We believe that intergovernmental agreement reached between Turkey and EU, the agreements reached between Turkey and Azerbaijan which is prerequisite, gas produced in Turkmenistan, may be in some point gas available from Northern Iraq coming from Turkey will bring a positive opportunity.

-What do you mean saying that an agreement is reached between Turkey and Azerbaijan?

-I am not going to talk about the confidential conversations but I visited Azerbaijan two weeks ago. I met with president Aliyev. Actually, I met him in twice in 11 weeks since I have been back in this job. I talked to him on telephone. I met with all appropriate officials in Turkey including their energy minister Mr. Yildiz and few weeks prior to that with president Gul. From those conversations I know that they get closer. Things are not final yet. Nothing is ever final till it is final. But I think that progress has been made. It doesnâ€™t mean that there will be agreement tomorrow but we hope that it will be soon. And what ever differences they have the gap will be closed. It is in the interest of both countries to reach an agreement.

- Is it true that the Statoil has sent the official letter to the government of Azerbaijan requesting at least 8 BCM gas to be sent to Europe thru Nabucco pipeline?

I am not sure of specific letter but the point that you mentioned it is actually important. Azerbaijani gas is prerequisite to whether we are talking about Nabucco or Italy-Turkey-Greece interconnector. The question then becomes how much gas will come from Sahdeniz-2? We donâ€™t know for sure. There are various estimates that there will be up to 15-16 BCM. I do think the issue you are referring to is how much gas ends up going to Turkey to meet their internal demand and how much gas goes ends up going to Europe. Some companies, I canâ€™t tell you specifically which ones at this point but some companies have been saying that you really need to have 8 BCM available to get Nabucco started.

Our feeling is that once that is established in and Nabucco is sanctioned that is going to make more likely western gas coming from Turkmenistan and ultimately open up northern Iraq. There is a lot of potential in Azerbaijan. The Azerbaijani government thinks that Sahdeniz and other sides maybe have more gas. Initial gas will come from Azerbaijan. Probably it will take longer to get some other gas.