In the WSJ regarding natural gas find:
BP's Gas Find in Azerbaijan
Roils U.S. Plan for Pipeline
By BHUSHAN BAHREE
Staff Reporter of THE WALL STREET JOURNAL
BP Amoco PLC announced a huge gas find in Azerbaijan, which has the
potential to become a major exporter of natural gas to the fast-growing
Turkish market. The find could upset U.S.-backed plans for a
trans-Caspian pipeline from Turkmenistan.
That BP Amoco had found gas in Shah Deniz,
offshore from the Caspian Sea, became
known recently. But the extent of the
discovery became clear Monday when BP
Amoco released test results and suggested setting up a joint working group
with Azerbaijani authorities.
Gas experts said the results showed Shah Deniz is a huge gas field, with
reserves in excess of 400 billion cubic meters. The size of the discovery
has great commercial potential.
The obvious export destination is Turkey, the only market in the region that
has the need for gas and the money to pay for it. Last year, Turkey used
about 14 billion cubic meters of gas. Botas, Turkey's national gas
company, has projected demand rising very rapidly to about 45 billion
cubic meters by 2005.
That's more than enough to whet the appetite of Russia's Gazprom,
already Turkey's main supplier through a pipeline that runs along the
eastern shore of the Black Sea; and of Turkmenistan, which has huge
reserves of the fuel but hardly any outlets after a dispute with Russia ended
its access to Gazprom's European pipeline network.
Iran, which has the world's second-largest gas reserves after Russia,
contracted to supply Turkey with 10 billion cubic meters of gas annually
over 20 years in a deal valued at $20 billion.
U.S. officials have cautioned Azerbaijan against going it alone with an
export gas line, which industry experts estimate could cost almost $2
billion to link Shah Deniz with Ankara, Turkey's capital.
Earlier this year, Turkmenistan awarded the trans-Caspian gas-line project
to PSG International, jointly owned by GE Capital Services, the finance
unit of General Electric Co., and Bechtel Enterprises, a unit of Bechtel
Group Inc. PSG, which intends to bring Turkmen gas to Turkey across the
Caspian through a pipeline estimated to cost about $2.5 billion, is looking
for other partners for the project.
Gazprom has found a partner in Italy's energy company ENI SpA for its
$3 billion project to run a north-south pipeline with a capacity of about 16
billion cubic meters under the Black Sea to Turkey.
BP Amoco has a 25.5% stake in Shah Deniz and is the operator.
Norway's state-owned Statoil ASA also has a 25.5% interest. Other
members of the group include: Azerbaijan's state oil company Socar;
France's Elf Aquitaine SA; LukAgip NV, a joint venture between Russia's
Lukoil and the Agip unit of ENI; Oil Industries Engineering & Construction
of Iran; and Turkish Petroleum Overseas Co.
--Hugh Pope contributed to this article.
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