"I expect a heads of agreement with the Shakh Deniz consortium relatively soon," he said, referring to the $25 billion gas development planned in Azerbaijan's sector of the Caspian Sea.
He said that Nabucco shareholders Austrian OMV, Germany's RWE and Hungary's MOL were also confident that the government of Iraq would find a way to facilitate gas exports. The companies have a cooperation agreement with the Kurdistan Regional Government that Baghdad does not acknowledge.
The Nabucco pipeline concept is intended to kill two birds with one stone: to meet European demand as indigenous gas production lags; and to offer central Asian gas producers an alternative, affluent market to Russia and now China.
But Mitschek said it had been so far a question of chicken and egg: until Nabucco is a reality, gas producers have had to look elsewhere for firm sales and defer the final investment decision on Shakh Deniz. And until gas sales agreements were reached, it was impossible for the project's partners to take the final investment decision for Nabucco.
Today's mandate letter changes all that, he said. "Concrete talks will now start and this is a big push for the project." These talks will involve UK major BP, which has capacity in the South Caucasus gas line, which carries gas from Azerbaijan to Turkey through Georgia. He said the banks would not have
signed the mandate letter had there been any doubt that the project would work.
Mitschek said the letter was the company's third triumph this year, following the ratification of intergovernmental agreements and the start of work on the branch lines within Turkey, to the borders with Georgia and Iraq.
