Nabucco agreement with northern Iraqi government must be reviewed

Georgia, Tbilisi, April 5 / Trend A.Badalova /

Iraqi Research Center Director Riyadh Al-Gayim believes Iraqi gas supplies to the Nabucco pipeline cannot be carried out on the basis of agreements signed with the government in northern Iraq.

"The Nabucco project can rely on the timely transportation of a given volume of Iraqi gas only if an agreement on deliveries is agreed upon with the government, but not with the governments of individual regions lacking such authority," Al-Gayim told Trend over telephone.

Nabucco is designed to transport gas from the Caspian region and the Middle East to the EU. Construction is planned to start in 2012 and first supplies in 2015.

Azerbaijan and Iraq are considered to be the main gas suppliers in the project's first phase. About 8-10 and 8 billion cubic meters are expected to be received. Subsequently, it is planned to use Turkmen gas in the project.

The project's participants include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE.

The RWE announced the signing of a cooperation agreement with the regional government in August. The agreement stipulated assistance in developing and designing domestic and export gas transportation infrastructure. The cooperation also provides for agreements to transport gas from the region to Turkey and Europe.

Al-Gayim does not believe in the possibility of developing new fields in northern Iraq. He said gas supplies from the region are possible only if the German company reviews the agreement.

"Based on Iraqi legislation, any contracts between foreign companies and Iraqi regions should be agreed upon with the Iraqi government," Al-Gayim said.

An energy agreement, he said, should be agreed upon directly with the Iraqi government.

The Iraqi central government and northern Iraq's authorities do not agree on the process for signing agreements with foreign investors in the energy sphere. The country lacks a holistic legal and regulatory framework for attracting investment. It has not yet adopted a framework law on hydrocarbons approved by the Iraqi Cabinet of Ministers in February 2007.

He said Nabucco is a significant project for the Iraqi economy and infrastructure.

"The volume scheduled for the first phase will be ready for transportation in the required deadline," Al-Gayim said. "However, much depends on the foreign companies that specialize in gas production."

According to BP, Iraq's proven gas reserves amounted to 3.17 trillion cubic meters in early 2010.

A.Tagiyeva contributed to the article.