Smiles in Greece as pipeline rival concedes loss

Smiles in crisis-hit Greece as rival concedes loss in Caspian pipeline bid

Associated Press
Smiles in Greece as pipeline rival concedes loss
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Greece's Finance Minister Yannis Stournaras, right, and Trans Adriatic Pipeline's Managing Director Kjetil Tungland shake hands after the signing of an agreement in Athens, Wednesday, June 26, 2013. The Greek Government has met with top executives from an Azerbaijan natural gas consortium who are due to announce plans Friday on a major pipeline deal to western Europe. Crisis-hit Greece is backing the Trans-Adriatic Pipeline, TAP, project that would cross its territory before running across southern Albania and undersea to Italy. (AP Photo/Thanassis Stavrakis)

ATHENS, Greece (AP) -- Greece signed an investment deal with a pipeline consortium Wednesday to transport Caspian Sea gas to western Europe, hours after the backer of a rival venture said it had lost out.

The agreement was signed ahead of an official announcement in Azerbaijan Friday for the selection of a pipeline route: with the Greece-Albania-Italy Trans-Adriatic Pipeline, or TAP, in competition with the Nabucco West venture that would run across Bulgaria, Romania, Hungary and Austria.

Austrian power utility OMV, which is backing Nabucco, said Wednesday that it had not been selected.

"The Nabucco West project was not selected by the consortium. While OMV accepts the decision of the consortium, OMV is of the opinion that the offer ... met all the selection criteria and was highly competitive," a company statement said.

The TAP consortium is made up of Trans Adriatic Pipeline project comprises of Norway's Statoil, Axpo of Switzerland and the German firm E.ON.

The pipeline would run nearly 800 kilometers (500 miles) across northern Greece, and into southern Albania before traveling under sea to Italy.

TAP and BP, the main developer of the Shah Deniz gas field in the Caspian Sea, had no comment on OMV's announcement.

But officials in Athens were buoyed by the developments — a rare sign of good news in a country battered by financial crisis and recession that began in late 2008.

"Greece is becoming an energy hub in the region — that is of course if we are selected," Finance Minister Yannis Stournaras said after signing the agreement with TAP. The event was celebrated with glasses of champagne at an Athens hotel.

Kjetil Tungland, TAP's Managing Director, repeated the consortium's pledge that the venture would lead to the investment of 1.5 billion euros ($1.95 billion) in Greece, creating at least 2,000 jobs.

"I look forward to many years of close cooperation in Greece," he said.

"We are well on our way to deliver a project that will have notable positive impact on Greece, the region as well as European energy objectives."

Earlier, Greek Prime Minister Antonis Samaras met with top executives from the Azerbaijan natural gas consortium — from BP and Azeri state energy firm Socar.

The European Union and the United States both enthusiastically support building a connection to Azeri gas, arguing it to moderate Russia's dominance.

Socar is currently the lead bidder in the planned privatization of Greece's natural gas network operator, Desfa, while Russian energy giant Gazprom earlier this month abruptly pulled out of negotiations to buy a stake in Greek natural gas company DEPA.

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