Azerbaijan, Baku, September 12 / Trend , A.Badalova /
Nabucco and South Stream pipeline projects, of which representatives have repeatedly denied their competing character, act as competitors in reality. It would be truer to say they are competitors exactly from the Russian point of view. In case of construction of South Stream gas pipeline, Europe will acquire an additional route of gas supply, and Nabucco is necessary for it as an alternative to protect itself from the risks of breaks of Russian gas supplies. The European desire is understandable, and even serves as success in the embodiment in this sense, considering the gas crisis that occurred between Russia and Ukraine in winter 2008-2009.
What are the chances of Russia today, more specifically lobbied its South Stream project, to succeed? If to compare Russian and European projects in the context of two competing gas pipelines, the second has several advantages.
The main unresolved issue for both projects is the question of sources of supply. Nabucco project is aimed at Caspian and Middle Eastern gas. An additional, but still exorbitant option is the Iranian gas. According to many experts, the Iranian gas would completely solve all the problems with filling the Nabucco gas pipeline.
The resource base for the South Stream is mostly gas from Central Asia. However, considering the current relations between Russia and Turkmenistan, there are serious doubts about the possibility of supplies of Turkmen gas through Russia's pipelines. Disagreements between the two countries began in April after a crash on the pipeline Central Asia - Center-4, after which Turkmenistan stopped selling its natural gas to Russia. Gleam in the relations between the countries is not observed yet, and in the issue of gas supplies, now Turkmenistan openly leans toward the European direction.
According to data provided by BP, the proven gas reserves of Turkmenistan as of 1 January 2009 were estimated at 7.94 trillion cubic meters.
Capacity of Nabucco gas pipeline is 31 billion cubic meters per year. Initially, the capacity of South Stream gas pipeline was planned at 30 billion cubic meters per year, but in May, Gazprom and Eni (the initiators of the project) agreed to its expansion to 63 billion cubic meters per year. Thus, the question of filling the pipeline for this project is now much sharper.
The second important problem both for South Stream and Nabucco is the question of funding. However, here the European project, compared with Russian, has a better chance of success. EU will not participate in financing the South Stream pipeline project, of which cost, according to various estimates, ranges from $15 to $25 billion. This was declared by the Head of the European Commission Jose Manuel Barroso. The European Bank for Reconstruction and Development and European Investment Bank have already highlighted preparedness to assist in financing the Nabucco project, which is estimated at $10.1 billion.
This year an additional blow to the South Stream project was a statement in July by the newly elected Prime Minister of Bulgaria Boyko Borisov on his country's intention to refuse to participate in Russia's project. This event ironically coincided with the signing of an inter-governmental agreement in Ankara on the Nabucco project. Borisov stated in September that the country will need two months to decide whether it will join energy projects together with Russia, which include South Stream as well. Agreement between Russia and Bulgaria on the participation in the South Stream project was signed on January 18, 2008.
Considering that it was planned to build the gas pipeline through Bulgaria, without its participation, this project looks very hazy, but shifting the route may require additional investment.
South Stream pipeline, which is scheduled to become operational in late 2014 - early 2015, will pass through the Black Sea to the countries of South and Central Europe. The pipeline envisages to export about 35 percent of the total Russian gas supplies to Europe. The sea stretch of the pipeline is planned to lay through the Black Sea from the compressor station Beregova on Russia's coast to the coast in Bulgaria.
The first deliveries of the Nabucco gas pipeline are scheduled for 2014. The first phase includes laying a new pipeline with a length of 2,000 kilometers from the Turkish border to Austrian Baumgarten. The second phase includes the construction of other stretch of the pipeline on the border between Turkey and Georgia, as well as Turkey and Iran.
Despite that the construction of both pipelines pose a number of technical difficulties, and problems of financing and completion, today the chances of implementing the Nabucco project look more realistic compared to South Stream.
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