Nabucco pipeline still up in the air

The Southern Gas Corridor consists of three projects of which the Nabucco gas pipeline is an integral. Deposits in Azerbaijan and Turkmenistan are considered to be the probable resource basis of the Nabucco pipeline that is expected to pass through Georgia and Turkey. The potential importers of gas from the Caspian Sea region are almost the same countries of Europe as that of the Russian-Italian project, Southern Stream.

The European Commission Head plans to re-energize the Nabucco project since Baku and Ashkhabad have no financial assurances from the European Union to construct the pipeline. Meanwhile, Europeans are quite uncertain about the reliability of the resource basis. In these circumstances, the project has little chances for success, says the head of the analytical department of the National Energy Security Foundation, Alexander Pasechnik.

"The Nabucco project is facing financial problems, but how to fill the pipeline is the crucial issue. It has no resource basis. At present, it hopes for the Azeri potential, especially the supplies from the Shakh-Deniz deposit, which may be reserved for this project. However, this cannot be considered a breakthrough because gas from Azerbaijan will be insufficient. The EU has to find some other sources to fill the pipeline,” Alexander Pasechnik said.

 Azerbaijan signed a long-term contract to sell gas to Iran ahead of the visit to Baku of Jose Barroso. Earlier, Iran took away part of Turkmen gas from Europe. Turkmenistan, like Azerbaijan, politically supports Nabucco, but has no knowledge of how to link its pipeline infrastructure to that of Azerbaijan to supply gas to Europe. Other Caspian Sea littoral states believe that it will be possible to lay a pipeline from Turkmenistan to Azerbaijan only after the approval of the legal status of the Caspian Sea. This has nothing to do with the visit to Baku, and from there to Ashkhabad, of the European Commission Head. In view of this, the director of the Russian Energy Development Foundation, Sergei Pikin has this to say.

“Until there is no a detailed project where everything is stated from the production of gas to selling it to the consumer and the payback period, we can talk only about the political aspect of the project. Undoubtedly, Europe needs the gas pipeline because this is diversification and an “assurance from eastern neighbours” as the European countries disire to express it. However, whether the project assures Europe is an open question,” Sergei Pikin said.

Moreover, the “Southern Gas Corridor” is linked with risks because Kurdish separatists often launch attacks on Turkish territory. It is also a problem to guarantee safety to the gas pipeline in Georgia. This may worsen if Azerbaijan secures the backing of the EU that it will help the country to solve its conflict with Armenia. The reason here is that the Nabucco gas pipeline is expected to pass through a largely-Armenian populated territory.

By Fedoruk Vladimir

The Voice of Russia, December 13, 2011