Azerbaijan hedging pipeline bets

Feb. 13, 2013 at 6:33 AM
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BAKU, Azerbaijan, Feb. 13 (UPI) -- A state energy company in Azerbaijan said it's worth the risk in a competitive European natural gas field to move forward with competing pipeline decisions.

Elshad Nasirov, vice president of the State Oil Co. of Azerbaijan Republic, said at a Baku energy conference that a final investment decision on the offshore Shah Deniz gas field is expected in October.

Complementary pipeline projects Nabucco West and the Trans-Adriatic Pipeline may rely on Azeri natural gas. Both are included in the Southern Corridor of energy projects meant to break Russia's grip on the regional energy sector.

Azerbaijan is expected to pay more than $40 million for its work with the competing pipelines.

"It is better to take the risk of $40 (million)-45 million now to understand which project is worse than to lose more in the future," he was quoted by the region's Trend news service as saying.

Russian energy company Gazprom is sending gas through the Nord Stream pipeline in the Baltic Sea as part of an export diversification strategy. Its planned South Stream pipeline could run through Southern Europe.

A pipeline decision from Baku is expected by June. Trend reports Shah Deniz gas might not reach Europe by 2019, however.

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