EU strives to remove obstacles to implement Nabucco

Oil&Gas Materials 11 January 2011 17:34

Azerbaijan, Baku, Jan. 11 / Trend E. Ostapenko /

The upcoming visit of the European Commission senior officials to Azerbaijan and Turkmenistan this week, has signaled about the EU desire to resolve the issues hampering the rapid implementation of the Nabucco project, German expert Michael Laubsch said.

The upcoming visit underlines the fact that in 2011, the European Commission and the European Union are more than kin to further negotiate the problems of the Nabucco project and of course to solve several problems that Nabucco pipeline can come into reality sooner but not later," he told Trend over phone.

European Commission President Jose Manuel Barroso and EU Energy Commissioner Guenther Oettinger will visit Baku on Jan. 13-14 and Ashgabat on Jan. 15-16. According to the EU representation in Baku, during his visit to Azerbaijan, the head of the European Commission will sign several agreements, which will not be limited to the energy sector.

At a regular press-conference early January, Barroso assured that the Nabucco gas pipeline project will be implemented. The experts have linked his visit to Azerbaijan and Turkmenistan, the potential gas exporting countries, with the advancement in this issue.

This gas pipeline envisages natural gas transportation from the Caspian region to European countries, bypassing Russia through Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania and Austria.

The main gas channel, with a length of 3,300 kilometers, will be a continuation of the already-constructed Baku-Tbilisi-Erzurum gas pipeline and is designed for transporting 20-30 billion cubic meters of gas annually. The project is estimated at 7.9 billion euro.

It is difficult to predict if any concrete plan for the future gas supplies of Europe regarding Azerbaijan and Turkmenistan will be signed during the visit of Mr. Barroso and Mr. Ottinger during their stay in Baku and Ashgabat, Laubsch, the President of the Eurasian Transit Group, said. But this visit in early 2011 will prove that the European Union wants to go forward with the Nabucco project.

Striving to create this pipeline is based on the need to diversify energy supplies to the EU market for European gas consumers not to be completely dependent on gas supplies from Russia.

There are some difficulties with launching the project, particularly on gas supplies.

Turkmenistan has periodically declared its readiness to participate in the project and the availability of necessary gas supplies. However, there is no final agreement yet.

Turkmenistan is playing so called "pendulum tactics". It is still not quite sure if there is enough gas resource to participate in Nabucco pipeline or if they are just interested in jeopardizing Russia when they give signals that they would like to cooperate closer with the European Union, he said.

"Nabucco" is worth 7.9 billion euro, with its construction scheduled to start in 2011 and the first supplies to be commissioned in 2014. The project's participants include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE, each having an equal 16.67 percent share. The pipeline's maximum capacity will hit 31 billion cubic meters per year.

Roughly 30 percent of the total project cost will be invested by shareholders of Nabucco Gas Pipeline International, based on equity, while the remaining 70 percent will be paid by loans.

Laubsch said that the European Commission head's visit to Azerbaijan and Turkmenistan, given the presence of large gas reserves in Iraq, said that the EU and the Nabucco consortium in Vienna rely primarily on those countries in gas supplies for the project.

Iraq has large gas reserves, but the unstable political situation in the country gives green light to Azerbaijan and Turkmenistan.

According to BP, Turkmenistan's proven gas reserves as of early 2010 are estimated at 8.1 trillion cubic meters. Azerbaijan's proven gas reserves as of early 2010 are estimated at 1.31 trillion cubic meters.

V. Zhavoronkova contributed to the article.