Turkey pushes Europe to build Nabucco faster

Azerbaijan, Baku, January 15 / Trend , A.Badalova /

Turkey's giving permission for laying the expensive South Stream gas pipeline via its territory should push Europe to work more actively on Nabucco project. This authorization, which can be obtained by the end of the year, will enable to build the South Stream pipeline by 2011 in parallel with the timing of the construction of the EU-supported Nabucco.  

This week Russia and Turkey agreed that by 10 November, after considering all documents, including the environmental and geological expertise, Ankara may authorize the construction of South Stream, with a capacity of 63 billion cubic meters per year, through its territorial waters. It is scheduled to begin the construction immediately after the permission is given.

As known, Turkey aims to become a major transit hub for the transportation of the Middle East, Caspian and partly Russian gas to the European countries. This is also its role in the Nabucco project, designed to transport gas from the Caspian and the Middle East to the EU. Together with other four transit countries (Austria, Hungary, Romania and Bulgaria) for Nabucco pipeline, Turkey signed an inter-governmental agreement in 2009, which was important, and it is possible to say the only significant event around the project.

Other significant advancements in the implementation of the European Nabucco pipeline project were not observed last year. The main problems of the project - funding and filling the pipeline - were not resolved, but have become even more acute. Despite that late last year the consortium of the project started talks with potential lenders, the results of negotiations are still vague. One of the limiting factors for making a decision on financing the Nabucco project could be the lack of long-term contracts on gas supplies. At the same time, the potential gas suppliers for the project do not risk to give guarantees in the absence of apparent advancements on the project.

Azerbaijan and Turkmenistan, who are considered as suppliers for Nabucco with a capacity of 31 billion cubic meters per year, pursue a policy of diversifying export routes for their gas, which is in high demand, and despite that expressed interest in Nabucco, they have other market choices today. Thus, today Azerbaijan has contracts to supply gas to Iran, Russia, Georgia and Turkey. Turkmenistan has three directions of gas supply - Russia, China and Iran.

Russian project, however, inferiors to European. South Stream project costs about 25 billion euros, almost twice more than the cost of the Nabucco project (7.9 billion euros). In addition, according to an analysis of the German energy group RWE, the tariffs for transportation of thousand cubic meters of gas per 100 kilometers via the South Stream gas pipeline will be 3.8 euro compared to 1.7 euro per 100 kilometers via Nabucco gas pipeline.

South Stream gas pipeline project is implemented by Italian ENI and Russian Gazprom who have signed an agreement to build an offshore gas pipeline in June 2007. The offshore stretch of the pipeline on the territory of Russia will lie from the compressor station Pochinki to the gas transportation system Uzhgorod corridor to the compressor station Coast.

Currently several options are considered for further routes of the onshore South Stream gas pipeline, which will pass through the territory of the EU member countries. In order to implement the offshore stretch of the project, intergovernmental agreements have been signed with several countries of South and Central Europe, through which the pipeline will pass, including Bulgaria, Serbia, Hungary and Greece. Negotiations are held for similar agreements with Slovenia and Austria.

The offshore stretch of the pipeline, with length of about 900 km and maximum depth - more than 2,000 meters, will pass via the Black Sea from Russian to the Bulgarian coast.

Participants to the Nabucco gas pipeline project are Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE. Each of the participants have equal shares at 16.67 percent. The first gas supplies via the pipeline is scheduled for 2014.

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