Europe in search for gas

On Tuesday, the EU starts talks with Azerbaijan and Turkmenistan on the construction of a trans-Caspian gas pipeline, reports the Voice of Russia’s Anastasiya Pershkina. Experts say that the three parties’ possible consensus may contribute considerably to the construction of the Nabucco and Southern Gas Corridor gas pipelines.

EU officials touted the trans-Caspian pipeline as a Southern Gas Corridor’s and Nabucco’s major project to bring new sources of gas to Europe. The European Commission will conduct negotiations on behalf of all 27 EU member states to clinch a string of inter-governmental agreements ahead of the conclusion of the trans-Caspian pipeline treaty. Participating in the projects will be Azerbaijan, Turkmenistan, Kazakhstan, Uzbekistan, Georgia, Turkey, Egypt, Iraq, and Iran. Meanwhile, the EU has pointed to a spate of “relevant political realities”, which Brussels said should be duly in place in countries the EU is cooperating with on the projects.

In Moscow, Konstantin Simonov, of the National Energy Security Foundation, mentions a whole array of domestic problems in these countries, which he says may stall the implementation of the projects.

"The current situation in Northern Africa is complicated, Simonov says, citing Libya and Egypt, which are not taking part in the projects. A big question mark hangs over Algeria. Europe scrambled to search for gas in a region of colossal political risks, which may well ride roughshod over the implementation of the Nabucco project. I think that it’s hardly possible to speak about the Nabucco project as such, because any project stipulates adopting investment decisions, injecting hefty sums and striking relevant contracts. With no gas to fill the Nabucco pipeline yet, co-investors are understandably reluctant to pump money in what is unlikely to become a feasible project, Simonov says, referring to Nabucco."

Meanwhile, efforts are in full swing to complete the construction the North Stream gas pipeline in the Baltic Sea and the South Stream pipe in the Black Sea. Earlier this month, Russian energy giant Gazprom started filling one of Nord Stream’s two legs with technological gas.

Sergei Pikin, from the Moscow-based Energy Development Foundation, says that even in case of implementation of the Nabucco and Southern Corridor projects, Russian gas deliveries to Europe will continue given European customers’ ever-increasing gas demands.

"The Nabucco pipeline may compete with South Stream in terms of supply flexibility, something that, for example, has been demonstrated by Gazprom in the past couple of years. Focusing on long-term contracts and market prices remains one of Gazprom’s top priorities, Pikin says. As for South Stream, the project is still under intense political pressure, which may affect the project’s implementation in a possible worst-case scenario for Russia. Evens so, I do hope that our gas supplies to Europe will never be disrupted even in case of implementation of the Nabucco project, Pikin concludes."

It seems that the opening of Nabucco, due to be operational by 2015, has been postponed indefinitely because of the EU’s failure to arrive at an accommodation with partner countries, Russian experts say. Right now, the EU is desperately trying to do more to comply with the terms in a bid to bring new sources of gas to Europe.

By Anastasiya Pershkina

The Voice of Russia, September 13, 2011