LONDON, March 22 (Reuters) - The consortium developingAzerbaijan's giant Shah Deniz II gas field, Europe's best hopeof diversifying supplies away from Russia, is finding lessinterest for its gas from buyers across the continent, BP said on Friday.
BP's Vice President of Shah Deniz Development, Al Cook, saidthe project has seen a 25 percent reduction in demand expressedby European buyers since 2010 for future deliveries of Azeri gasonce it starts flowing through pipelines across Turkey to Europein 2019.
But despite the drop in interest, demand still far outstripsthe 10 billion cubic metres per annum (Bcma) that Azerbaijan hasearmarked for customers in Europe, Cook said.
"Two years ago demand for Azeri gas was 40 Bcma (billioncubic metres per annum), today it's 30 Bcma," BP's VicePresident of Shah Deniz Development Al Cook said.
Two groups are currently competing to pipe Azerbaijan'sCaspian Sea gas into western European markets.
The Shah Deniz consortium, which comprises BP, Statoil, state-run Azeri firm SOCAR and Total amongothers, will decide by end-June whether to pipe gas into Austriathrough the proposed Nabucco West pipeline or into Italy throughthe rival Trans-Adriatic Pipeline (TAP) project, Cook said.
Decreasing demand for Azeri gas in Europe is due tocompanies making more realistic estimates of their future gasdemand compared with a few years ago, Cook said, denying that itwas the result of economic slowdown weighing on energy demand.
"At the end of last year we nervously awaited the results ofbuying interest, but the desire for Azeri gas in Greece andsouthern Europe has not been dimmed (by the economic crisis),"Cook said.
BP expects first gas from Shah Deniz II to be delivered toTurkey in 2018 with early 2019 set for the first Azeri gas toreach western Europe in a major development that will reduceEuropean dependence on Russia for its energy supplies.
The European Union, which depends on Russia for about aquarter of its gas needs, wants to diminish that share bybankrolling new import corridors from the Caspian Sea viaAzerbaijan and Turkey.
Output from Shah Deniz II is expected to reach 16 Bcma ofnatural gas.
BP (BP.)
