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Tuesday, June 02, 2009

EU Rivals Must Unite to Counter Gazprom Bid, Azerbaijan Says

June 2,2009 - (Bloomberg by Lucian Kim) - European energy companies must set aside rivalries if they wish to prevent OAO Gazprom from buying up excess natural-gas volumes from the western Caspian basin, a vice president of the State Oil Co. of Azerbaijan said. Three European pipeline projects vying for Caspian Sea gas should first agree on transit via Turkey to give Azerbaijan an alternative offer to the Russian gas exporter’s, Elshad Nassirov said today in an interview in the Azeri capital Baku. Gazprom, which supplies about 25 percent of Europe’s gas, is seeking all the fuel produced in the second phase of Azerbaijan’s Shah Deniz development in an effort to remove the supply base for one of the projects, OMV AG’s Nabucco link. “The three projects should join us and Turkey in uniting efforts to make a transparent, reliable transit regime, which could be competitive to the Russian proposals,” Nassirov said. Azerbaijan, which became a gas exporter in 2007, is a key link in a U.S.-backed “southern energy corridor” that breaks Russian control over pipelines out of the Caspian region. Some European nations renewed calls to diversify energy imports away from Russia after gas supplies were halted in January during a Gazprom dispute with Ukraine. Nabucco would link Turkey to Austria via the Balkans. The Trans-Adriatic-Pipeline, backed by Swiss power company Elektrizitaets-Gesellschaft Laufenburg AG and Norway’s StatoilHydro ASA, would run from Greece to Italy via Albania, while Italian power company Edison SpA and state-owned Greek gas company Depa SA plan an alternative subsea link connecting the two countries. “As soon as this transit issue is completed, there will be enough gas for everyone,” Nassirov said, referring to volumes supplied by producers including Azerbaijan, Iraq, Iran or Turkmenistan.

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