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Nabucco project may be delayed. For ever

 

The fate of the European Nabucco project will be decided in the middle of this year. Experts link this to the progress in the talks between Turkey and Azerbaijan on the construction of the Trans-Anatolian gas pipeline (TANAP). Official Baku says that it plans to sign an agreement soon.  Amid the above-mentioned events, the European press is actively criticizing Azerbaijan, warning again of the danger of the Russian South Stream project.

 

The launching of the TANAP gas pipeline may finally change the concept of  gas supplies to South Europe, which is currently developing within the framework of the South Corridor Project and provides for the construction of three gas pipelines, including ITGI (Turkey- Greece- Italy), TAP (Turkey-Albania-Italy), and Nabucco( the Caspian Sea Region-Turkey-Europe). This corridor is meant for the diversification of gas supplies to Europe – meaning, first of all, efforts to decrease its dependence on the Russian gas. It was planned that the Nabucco gas pipeline, which is due to connect the Russian Caspian Sea Region with Turkey, would play a pivotal role here. After the presentation of this project, there appeared forecasts that Iran, Turkmenistan and Azerbaijan would become the suppliers for it. For objective reasons, only Baku can become the supplier today - only after the second stage of the Shah Deniz gas field is launched. In the current situation the Nabucco needs automatically put under threat the implementation of the South Corridor Project, Head of the National Energy Security Foundation Konstantin Simonov says.   

 

"The launching of the Shah Deniz deposit will make it possible to receive 16 billion cubic metres of gas, while for the time being, there’re applications for 3 pipes with a volume of 49 billion cubic metres of gas. The planned Nabucco capacity was slightly over 30 billion cubic metres of gas, which of course makes it the weakest chain of this triad because it needs all Azeri gas. Therefore, the pipeline will lead from Azerbaijan across Turkey to Europe. But this will not be the Nabucco pipeline."

What kind of pipeline this will be became evident at the end of last year, when Ankara and Baku signed a Memorandum of Understanding on the construction of the TANAP gas pipeline, which will transport gas from the Shah Deniz deposit to the western borders of Turkey. Its planned capacity is 16 billion cubic metres, and its cost is 7 billion euros. Just compare: the cost of the Nabucco project has already topped 15 billion euros. The consortium includes the Turkish Botas Petroleum Pipeline Corporation (BOTAS) and the State Oil Company of Azerbaijan (SOCAR), which left the Nabucco project together with the Germany’s RWE some time ago. On the other hand, the European banks said that they would support the TAP and the ITGI projects. Thus, we see that both Europe and Ankara stake on more economically profitable projects, President of the Institute of Energy and Finance Vladimir Feigan says.  

"Later this year Azerbaijan will pass a decision on the transportation of the main gas volumes. Taking into account that the European market is developing in the crisis conditions, the previously mentioned medium-sized gas pipelines have a better chance today.  As a result, Nabucco will step aside but the intrigue will remain."

Experts say that almost all the participants are interested in the preservation of this intrigue. For Brussels this is an issue of status – the point is that Nabucco was planned to free Europe from the “Moscow gas diktat” However, Baku has its own reasons for not unveiling its plans for the Nabucco project. It is not without reason that Head of the State Oil Company of Azerbaijan (SOCAR) Rovnag  Abdullayev stressed some days ago that TANAP is not aimed against this  project. Some political analysts believe that the issue of accession to the Shah Deniz gas may emerge during the discussion of Nagorno-Karabakh issue.

 

Speculations around the Nabucco future have triggered a new wave of criticism against the Russian South Stream project. However, Europe should not be afraid of the monopolization of South Europe’s market, Konstantin Simonov says. And the intensification of rivalry for the Azeri gas will not lead to the automatic strengthening of Moscow either, he added.

By Chernitsa Polina

The Voice of Russia, February 16, 2012


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