British Petroleum to abandon the Nabucco project

British Petroleum (BP) is withdrawing from the Nabucco gas pipeline project, in which it was, until now, a potential leading supplier of natural gas. This became clear from the statement of BP’s head of fuel refining and marketing Iain Conn in front of Reuters, quoted by ITAR-TASS. The reason for the UK oil major to declare its intention to abandon the project is its economic inefficiency. According to BP, the pipeline would be half empty for an indeterminate period of time and that renders it unprofitable and unfeasible.

According to initial estimates, about 16 billion cu m of natural gas per year were supposed to be shipped along the 3,900 km-long pipeline and an option for expanding its capacity to 30 billion cu m of natural gas later on was considered. The project's leader, Austrian oil group OMV, hoped to fill it in coming years by signing up additional suppliers in Turkmenistan, Iraq and possibly even Iran.

“BP is a key partner and a major shareholder in Nabucco. The project is based on intergovernmental agreements and none of these countries has hinted that it would like to withdraw. Moreover, these intergovernmental agreements will be valid for 50 years,” Dimitar Abadzhiev, Head of the project company’s Corporate Activities department and responsible for the relations with national governments and European institutions, said in an interview for the Bulgarian National Radio. According to him, this is “the most viable project, providing a separate, independent pipeline and real diversification of gas supply. The Bulgarian representative in the Nabucco Consortium said that the media were spreading mere comments, while the actual decision on the matter was to be made in June. This will be a decision on the route for shipping the gas from the Turkish-Bulgarian border to Central Europe.

The objective of Nabucco was to reduce Europe’s dependence on the supplies of natural gas from Russia via the alternative route from Central Asia and the Middle East to consumers on the Old Continent. Natural gas was to be shipped from the Azerbaijani Shah Deniz 2 gas field. Two weeks ago, however, the project company Nabucco Gas Pipeline International GmbH presented to the consortium developing the Azerbaijani field a slimmed down Nabucco West scheme, which is almost three times shorter - about 1,300 km long. The contraction of the gas pipeline by one-third was considered after the information that some of the major shareholders in the project - Germany’s RWE and Hungary’s MOL – intend to abandon the project.

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