The Nabucco consortium holds talks in Vienna

The consortium of six companies developing the Nabucco natural gas pipeline project is holding talks in Vienna to discuss logistics and purchase planning. Some experts were puzzled to learn the news since the situation with the Nabucco project is too complicated for negotiating this kind of issues.  

Actually, the project is doomed. But those who are interested in implementing it are persistent in looking for any chance to talk about the Nabucco. So we should not expect any breakthrough during the Vienna session, Mr. Konstantin Simonov, the director of the Energy Security Foundation, says: “If we look at the way the situation has unfolded this year, we`ll see that the project was about to fail. This meeting is rather aimed at demonstrating that the Nabucco is still on the European agenda.”

As of toady, the Nabucco is just a draft project lacking financing and fuel. Originally, it was planned to build a 3,300km natural gas pipe from Central Asia to the EU via Turkey and the Balkans. Construction was supposed to be started in 2013 and completed in 2015. Later, the deadlines were changed. The Nabucco GasPipeline InternationalGmbH's CEO,Reinhard Mitchek ,said first supplies are scheduled for 2017. It appears that the project`s supporters expect to receive gas from the Shakh-Denis field in Azerbaijan, where drills are due to begin exactly in 2017. Baku has not yet decided where to send its fuel, which poses more risks to the project.

Konstantin Simonov: “Two other projects are competing for gas from Baku – ITGI run by Tureky, Greece and Italy, and TAP, the Trans Adriatic Pipeline. Actually, these two projects will be enough to help Azerbaijan win a worthy place in the European market. Not to mention the fact that Russia is ready to buy it at a higher price. Azerbaijan has not yet decided on the issue and is busy bargaining for economic and political preferences.

Neither should they expect to get the Turkmen gas. Turkmenistan has no common pipe with Azerbaijan, and Russia will hardly allow them building a pipe under the Caspian Sea. Moscow sees now reason for taking environmental risks in the region when Europe received enough gas via the South Stream. Other sources the Nabucco consortium calls ‘alternative’ can hardly be considered reliable, too. Iran is facing sanctions. Iraq hardly meets its domestic need for oil and gas. The uprising in Egypt has placed energy supplies at the bottom of the national agenda. This all proves that the Nabucco consortium had not spent enough time on discussing the real potential of the proposed gas pipe.

Money is another problem: the initial cost of the project was announced as 7.8 billion euros. As of today, Bp says it is almost 14 billion euros. Half of the sum is supposed to be allocated by members of the consortium, the rest money will be borrowed from banks. But it is hardly likely that bankers will fall for empty talk and colorful computer presentations.

The Voice of Russia, August 22, 2011