...

Azerbaijan has been and remains one of most reliable potential gas suppliers for Nabucco

Oil&Gas Materials 23 February 2011 22:44 (UTC +04:00)

Azerbaijan, Baku, Feb. 23 /Trend, V.Zhavoronkova/

Azerbaijan has been and remains one of the most reliable countries - potential gas suppliers for Nabucco gas pipeline project if it is implemented, said European expert on energy issues Vasiliy Astrov.

"Azerbaijan has always been regarded as the most reliable side on which we can always count in terms of bringing gas to Nabucco," an economist at the Vienna Institute for International Economic Studies (WIIW) Astrov told Trend by telephone from Vienna.

The Nabucco is one of the Southern Corridor projects that imply the supply of gas from the Caspian region and the Middle East to the EU. Construction is scheduled to begin in 2012. First deliveries via the pipeline are projected for 2015.

The Southern Corridor is a priority EU energy project, diversifying energy supply routes and sources and increasing EU energy security. The Southern Corridor includes the Nabucco gas pipeline, Trans Adriatic Pipeline, White Stream, and ITGI.

Despite its reliability as a potential gas supplier, Azerbaijan is unable to completely fill the Nabucco gas pipeline after its launching. For this reason, it is planned to involve additional supplier countries, but in all of them, the provision of gas for the project is conditioned by several problems, the expert said.

Filling the pipeline is one of the key elements of the implementation of Nabucco. Exactly this factor is important for obtaining funding, which is possible only after a study of its economic efficiency. This validity depends on how they can ensure that the pipeline will be filled, the analyst believes.

The instability of gas suppliers for Nabucco, besides Azerbaijan, makes the prospects of the project problematic, said Astrov.

For example, one of the potential gas suppliers, Iraq, has an internal contradiction regarding the export of fuel through Nabucco.

"The problem is that basically we are talking about gas from northern Iraq, but inside Iraq there are different opinions on this point: the central government is not prepared to provide sufficient autonomy for the northern regions in matters of signing contracts for the gas supply," said the expert .

The situation with Turkmenistan, as a gas supplier for Nabucco, seems to be as: even if to assume that Ashgabat has enough gas to fill the pipeline, the matter is how this gas can be made available for Nabucco.

According to him, here there are two possible routes for gas from Turkmenistan to Nabucco: on the shore of the Caspian Sea and via its bottom (the Trans-Caspian gas pipeline), and they're both difficult, the expert said.

In the first case, the pipeline will have to pass through Iran, but Europe acts against it, and in the second case, the unresolved question of the status of the Caspian Sea can prevent it.

"Both Russia and Iran will be against the construction of a gas pipeline via the bottom of the Caspian Sea for obvious reasons, because it can reduce their influence as potential transit states, said Astrov - it is an old problem, and I do not think that something has changed in the last period."

Besides the problems with gas suppliers, the Nabucco gas pipeline project has a number of other problems.
"Recently, the European gas market has undergone significant changes, and I think that the interest in such projects, where it deals not only with Nabucco, but also with the South Stream gas pipelines and all that would link Europe with some specific region, has somewhat decreased," said Astrov.

According to him, there are some factors based on which it is possible to say that this interest is unlikely to revive.
This is due to the increased use of LNG (liquefied natural gas) in the region: over recent period, LNG deliveries to the European market have increased significantly, the expert said.

According to him, the share of LNG in the European market has grown and is likely to grow further: the gas market is increasingly starting to resemble the oil, which is more flexible and in which supply and demand on a global scale play a key role in determining prices.
As for Nabucco, according to Astrov, originally its idea was to diversify gas supplies to Europe and reduce Russia's role in this regard.

"Right now, given the increasing use of liquefied natural gas, we see the same diversification, the share of Gazprom [Russia's gas monopoly] has already fallen and may fall further. Its negotiating position has also weakened, and it had to make some concessions in pricing and in the "take-or-pay" system with different companies: Italian, Turkish, German and other," he said.

Tags:
Latest

Latest