ITGI looking to ship Mediterranean gas to Italy
The ITGI pipeline project is looking to ship natural gas from recently discovered Israeli and Cypriot gas fields but has not given up hope on gas from Azerbaijan, its chief executive said, Reuters reports.
Elio Ruggeri, head of the Italy-Turkey-Greece-Interconnector (ITGI), said on Friday the project was not tailor-made for one supplier and was ready to transport any gas coming from the Caspian region, the Middle East or the eastern Mediterranean.
The project was dealt a major blow in February when the Shah Deniz II consortium chose the Trans Adriatic Pipeline (TAP)project over ITGI as a possible route, should it decide on Italy as the destination for its Azeri gas.
"We have not given up our hope to re-engage with Shah Deniz. Obviously we acknowledge there is now a preference for TAP, but we will wait and see what will be the solution on that," Ruggeri told Reuters on the sidelines of an energy forum in Bulgaria.
ITGI plans to transport 10 billion cubic metres (bcm) a year of gas from the Turkish-Greek border to Italy.
"Shah Deniz is not the only source of gas in the region. Interesting opportunities are emerging also in the east Mediterranean, and ITGI is by concept a multi-source project," he said.
Producers in the Shah Deniz II field in Azerbaijan, led by BP and Statoil, plan to ship around 16 bcm a year through Turkey into Europe from 2017 or 2018.
A decision on which pipeline project will get Shah Deniz II's go-ahead is expected in June.
Another contender for the Azeri gas is the Nabucco pipeline project, which would transport central Asian gas into Europe via Turkey, Bulgaria, Romania and Hungary into Austria and western Europe.
But critics say the 32 bcm Nabucco project, estimated at a development cost of over $12 billion, is too expensive and too big and must downsize if it is to be chosen.
MEDITERRANEAN GAS FOR ITGI?
Ruggeri said the ITGI project had completed most permitting procedures and was ready to take a final investment decision by mid-2013.
"Whichever supply comes first, we will look into it. In the Leviathan basin offshore Israel, near Cyprus, near Greece. All this region has significant amounts of gas reserves," he said.
Texas-based Noble Energy and its Israeli exploration partner Delek have said the Leviathan field - 130 km (80 miles) off the Israeli port of Haifa - is the world's biggest deepwater gas find in the past decade, with reserves estimated around 480 bcm.
That is almost five times as much as Britain, Europe's biggest gas consumer, uses per year.
The Leviathan gas field is one of several large recent gas discoveries in the eastern Mediterranean basin that have the potential of shifting Europe's gas industry from the North Sea, where reserves are dwindling fast.
Most reserves identified so far are in Israeli or Cypriot waters, but the prospect of a gas bonanza in the region has renewed maritime border disputes between Turkey, Lebanon, Cyprus, Israel and Greece.
Delek and Noble are seeking partners in their Israeli and Cypriot fields to further explore the waters in which experts also hope to find some 600 million barrels of oil hidden in a layer beneath the gas.
TAP SEEKS ITALIAN PARTNER
The main criticism of rival project TAP has been its lack of an Italian partner, with critics arguing that a pipeline making landfall in Italy would never secure political backing without local involvement.
Its main shareholders are Statoil, Swiss EGL and Germany's E.ON Ruhrgas.
The project plans to build a 520 km gas pipeline with a capacity of 16 bcm that would connect Greece with Italy via Albania and the Adriatic Sea.
Italian utility Enel said this month that it was interested in joining the group. (nL5E8G293C)
TAP commercial director Lutz Landwehr said on Friday that Enel would be "a valuable partner for our project" but that there were also talks with other companies.
"There are other big European companies we talk to," Landwehr said, without specifying.
Landwehr said that a new partner would likely take a stake out of Statoil or EGL.
"E.ON is more or less in a reasonable position, whereas EGL is probably a bit oversized in the project," Landwehr said.
"Statoil has a different interest in its involvement in the project, they want to see the development of TAP happen to support their upstream investment in Shah Deniz. So they have no strategic interest in being a shareholder in the company," he added.
Landwehr said that all changes in shareholdings would likely happen within the next year, before the Shah Deniz II consortium is expected to make their final investment decision.