The ITGI pipeline project, seems to be facing its first serious financial issues, according to the latest information that relay around the reluctance of banking institutions to back up the plan, since there are no definite agreements regarding the flow of specific amounts of natural gas from Azerbaitzan.
The estimations of the consortium of the ITGI, is that its cost may reach up to 2.5 billion Euros and its capacity will be around 15 billion cbm per year. Already the participating companies have announced that the project will be financed mostly through bank loans and the representative of EDISON in Turkey, Mr. Akin Okzan, stated recently that “The banks that want to participate are eager for the gas transfer deal to be concluded so as to be able to proceed with the necessary financing procedures”.
The Athens-based “Energia” analysis service, assumes that the main problem is to be located in the availability of the Azeri gas that for the time being is not sufficient to meet the demands of the project. Azerbaitzan for the period 2013-2014 will be able to have completed the first phase of its capacity enlargement by which it will gain approximately 6 billion cbm per annum that it could transfer abroad. Of this amount just 3 billion cbm are scheduled to be able to be transferred to Greece, Bulgaria and Romania, according to present agreement, a quantity significantly lower from the original design of the ITGI.
Furthermore, the Shah Deniz II is scheduled from 2016 to be able to add another 17 billion cbm in the annual Azeri production, by which already 7 billion have been agreed to be sold to Turkey directly and the rest will be transferred to various European markets. That means that rival pipelines such as Nabucco will have access to that amounts, leaving ITGI looking for capacity.
Also, on the 1st of June 2010 during the 17th international Azeri oil and gas conference, the ministry of energy of the country although he mentioned that during 2013-2016 there is going to be an upgrade in domestic production, he did not reveal the definite intentions of Baku regarding the quantities that will be exported through Shah Deniz, thus leaving room for speculation.
In overall, there is a challenging aspect regarding the financial viability of the ITGI project and local experts point out that the most crucial period that will determine the viability or not of the project, is the first semester of 2011 when a biding competition for the second phase of Shah Deniz will take place, under which it is going to be specified who gets what quantity from there, therefore determining which projects would be more attractive for the banking institutions to finance.
It has to be noted that ITGI, along with South Stream, Nabucco and the Trans-Adriatic Pipeline, are for the time being the main competitive projects for transfering mass amounts of natural gas from the Caspian region and possibly Iran for the coming decades, and they are all scheduled to traverse regions of the Balkans. |
Ioannis Michaletos
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