116
alone, with the Baltic States being almost wholly dependent, and Central European
countries such as Hungary and Austria clocking up an intake of around 85% (Ileri
2011:2).
The Nabucco Project, which has existed only in the word for over 10 years, can
be considered a nonstarter at this point. In its stead, the Shah Deniz Consortium has
put its weight behind the Trans-Adriatic Natural Gas Pipeline Project (TAP). BP,
Total, Statoil, and Socar (which form the Shah Deniz Consortium) have agreed to
construct the new line through Greece, Albania, and Italy. The TAP Project was
developed by the Norwegian Statoil, the Swiss AXPO, and the German E.ON
Ruhrgas consortium. After the route of the project has been clarified, negotiations
will begin in order to invite the Shah Deniz consortium into the project as a final
stage before its realization (www.gazetevatan.com 2016).
The consortium, which operates the Shah Deniz 2 site of the Caspian coast, has
opted for the use of the Trans-Adriatic Pipeline (TAP) instead of Nabucco, joining
with the Trans-Anatolian Natural Gas Pipeline (TANAP) in delivering Azerbaijani
gas through Turkey’s western frontier, transporting it to European markets (www.
t24.com.tr 2017).
So why the change of plan? Construction on Nabucco was scheduled for 2013
with the first gas flow being envisioned to take place in 2017; however, construction
was initially suspended because the partner countries involved could not afford to
burden the costs. For this reason, a deal was reached with SOCAR and the TransAnatolian Pipeline was quickly commissioned (www.t24.com.tr 2017)
US foreign policy and energy analysts point to a number of reasons why the
Nabucco projects failed: Of these experts, Ed Chow, points to errors of judgment
caused by lack of technical knowledge, stating that the crucial detail lost upon policymakers is that the nature of gas pipelines differs from those of oil pipelines.
Although the BTC oil pipeline proved a relative success, policymakers essentially
learned the wrong lessons from the experience, wrongly assuming that the same
elements of the planning and execution of that project could be applied to the fulfillment of the Nabucco plan. However, when the technicalities are taken into consideration, the overall costs of such a project put the potential yields of such an
investment into question, and according to Chow, signatories were ill-prepared to
deal with this reality:
We must ask why Nabucco failed, Nabucco failed because we had six project sponsors with
no gas to transport. Six partner who neither had secured a market for 33 bcm gas to be sent.
Some of these partners themselves were not financially reliable. How could Bulgar Trans
Gas afford to invest a 1/6 of the Nabucco pipeline cost? There was no real commercial champion behind the project. For some time, energy diplomats thought all they had to do to replicate the success of the BTC was to talk to people. But for reasons specific to the industry
it may not be desirable. I think this is the part often missed by people, because they are in
hurry. And you cannot embark on these kinds of problems in a hurry. I told diplomats ‘If you
start tomorrow you can hope to get the pipeline running in 7 years—if you are lucky. It may
take 10–15 years. I don’t know’. The idea that success in oil can be replicated in gas is a
myth. Oil and gas are very different elements. (Author’s Interview with Dr. Ed Chow 2016)
The cost of an oil pipeline can be shouldered by an energy producer as it allows
the product to be released on the global market. However, the task of constructing a
3 International Context of the New Era and the Caspian Sea Region
alone, with the Baltic States being almost wholly dependent, and Central European
countries such as Hungary and Austria clocking up an intake of around 85% (Ileri
2011:2).
The Nabucco Project, which has existed only in the word for over 10 years, can
be considered a nonstarter at this point. In its stead, the Shah Deniz Consortium has
put its weight behind the Trans-Adriatic Natural Gas Pipeline Project (TAP). BP,
Total, Statoil, and Socar (which form the Shah Deniz Consortium) have agreed to
construct the new line through Greece, Albania, and Italy. The TAP Project was
developed by the Norwegian Statoil, the Swiss AXPO, and the German E.ON
Ruhrgas consortium. After the route of the project has been clarified, negotiations
will begin in order to invite the Shah Deniz consortium into the project as a final
stage before its realization (www.gazetevatan.com 2016).
The consortium, which operates the Shah Deniz 2 site of the Caspian coast, has
opted for the use of the Trans-Adriatic Pipeline (TAP) instead of Nabucco, joining
with the Trans-Anatolian Natural Gas Pipeline (TANAP) in delivering Azerbaijani
gas through Turkey’s western frontier, transporting it to European markets (www.
t24.com.tr 2017).
So why the change of plan? Construction on Nabucco was scheduled for 2013
with the first gas flow being envisioned to take place in 2017; however, construction
was initially suspended because the partner countries involved could not afford to
burden the costs. For this reason, a deal was reached with SOCAR and the TransAnatolian Pipeline was quickly commissioned (www.t24.com.tr 2017)
US foreign policy and energy analysts point to a number of reasons why the
Nabucco projects failed: Of these experts, Ed Chow, points to errors of judgment
caused by lack of technical knowledge, stating that the crucial detail lost upon policymakers is that the nature of gas pipelines differs from those of oil pipelines.
Although the BTC oil pipeline proved a relative success, policymakers essentially
learned the wrong lessons from the experience, wrongly assuming that the same
elements of the planning and execution of that project could be applied to the fulfillment of the Nabucco plan. However, when the technicalities are taken into consideration, the overall costs of such a project put the potential yields of such an
investment into question, and according to Chow, signatories were ill-prepared to
deal with this reality:
We must ask why Nabucco failed, Nabucco failed because we had six project sponsors with
no gas to transport. Six partner who neither had secured a market for 33 bcm gas to be sent.
Some of these partners themselves were not financially reliable. How could Bulgar Trans
Gas afford to invest a 1/6 of the Nabucco pipeline cost? There was no real commercial champion behind the project. For some time, energy diplomats thought all they had to do to replicate the success of the BTC was to talk to people. But for reasons specific to the industry
it may not be desirable. I think this is the part often missed by people, because they are in
hurry. And you cannot embark on these kinds of problems in a hurry. I told diplomats ‘If you
start tomorrow you can hope to get the pipeline running in 7 years—if you are lucky. It may
take 10–15 years. I don’t know’. The idea that success in oil can be replicated in gas is a
myth. Oil and gas are very different elements. (Author’s Interview with Dr. Ed Chow 2016)
The cost of an oil pipeline can be shouldered by an energy producer as it allows
the product to be released on the global market. However, the task of constructing a
3 International Context of the New Era and the Caspian Sea Region