La Forza del destino (Power of fate)

The experts at the Atlantic Council of the United States have doubted the viability of the Nabucco gas pipeline project. According to them, Nabucco must either be frozen or merged with other gas projects.

Preparations for the Nabucco project began 9 years ago. The project, which unites gas operators from Austria, Bulgaria, Hungary, Germany, Romania and Turkey, envisaged the supplies of Turkmen, Azeri and Iranian gas to Europe. However, the project’s resource base is its main stumbling block. In particular, Azerbaijan does not rule out selling all its gas to Russia’s Gazprom, while contracts with Iran are out of the question in the context of Iran’s nuclear program. In order to supply gas from Turkmenistan it is necessary to build an undersea gas pipe from the city of Turkmenbashi to the Azeri capital of Baku, which means additional costs.

There have been talks that gas for Nabucco can be pumped from Iraq’s Kurdistan but this implies new pipes and new investments again.

In fact, European experts knew from the very start that the project would not be easy to implement. But the ambition to lessen European dependency on Russian gas prevailed stronger. As a result Europe has backed itself into a corner, Konstantin Simonov, the head of the National Energy Security Foundation, says.

The EU never hid that the project is difficult and full of problems. The absence of a resource base is root of all this. Half of the project is financed by its participants while the other half of the investment should come from the open market. But among the participants only Germany’s RWE and Austria’s OMV have actual money. It is impossible to attract investments because investors always ask you: where is the gas coming from and who is selling it? In other words: no gas - no investments, no investments - no project.

We should not forget that the US, which now doubts the viability of the project, was the very country that persuaded the EU to lessen its dependency on Russian gas. But the alternative proposed by Washington is quite shaky as well, our expert says.

What the US proposes to the EU claiming that it will be advantageous for European energy security, makes things difficult for Europe again. They proposed that Europe should develop relations with North Africa, but the outcome of that we can see today. What else? Partnership with Turkmenistan, the Nabucco gas pipeline, dependency on gas supplies from the Persian Gulf – all these were the ideas of the US. Maybe some officials in Brussels think that this is the way towards diversification but I think time will show that most of these decisions were wrong. 

If earlier Nabucco was up against Russia’s South Stream, it is now competing with other European projects such as the TransAdriatic pipeline, which joins Greece Albania and Italy, and the Turkey-Greece-Italy interconnector. Both projects are extensions of existing pipelines, first of all - the South Caucasian pipeline, Baku-Tbilisi-Erzurum. According to Sergey Chizhov, the head of the Russian Gas Union, there is only one way out of the current situation.

A number of competing  was never economically viable. The US and the EU have failed to come up with any alternative.

As a result the construction of Nabucco, which was to start this year, has been shifted to 2017. Most European countries cannot wait for such a long time and more and more countries are joining Russia’s South Stream project. Germany’s BASF announced that it will become a part of South Stream with Serbia planning to contribute 700 million euro to as well. Russia has promised all participants that gas supplies via South Stream will begin according to schedule, in 2015.    

The Voice of Russia, 25.03.2011