ECONOMY

No Azeri gas before 2010

BAKU (Reuters) – Norway’s Statoil said yesterday it did not believe Azeri gas would penetrate Europe beyond Turkey before 2010, despite Greek hopes to begin imports by 2008. Statoil Vice President Peter Mellbye told a news conference he believed the end of Turkey’s economic recession would mean Azerbaijan’s $3.2 billion Shakh Deniz gas project could start supplies by 2006. But he added that project leaders Statoil and BP would not have enough gas to supply Greece and other southern European states via Turkey before 2010. «Azeri gas is unlikely to go to Europe before 2010. The second production phase at Shakh Deniz will begin sometime in 2010 and we have yet to find out what would be the development costs and the cost of gas supplies to Europe,» he said. Greece and Turkey, which relies heavily on gas imports from Russia, are hoping to become energy hubs for southern Europe and were planning to import gas from the Caspian Sea and send it on to Europe, including to Italy, from 2006. Greece and Turkey agreed to build a $300 million gas pipeline between them to carry up to 11 billion cubic meters (bcm) of gas a year – 3 bcm for Greece itself and the remaining volume for re-export to Europe. But after Statoil and BP decided to postpone first gas deliveries to Turkey by one year to 2006 due to problems with sales agreement and concerns over gas demand, Greece was also forced to put its plans back to 2008. Statoil and BP plan to spend $3.2 billion to build an offshore platform and a pipeline to supply Turkey with up to 6.6 bcm of gas a year from 2007-2008. Statoil and BP each hold 25.5 percent in the field. Other partners include France’s Total and LukAgip – a venture between Russia’s Lukoil and Italy’s Agip.