The EU’s energy commissioner remains upbeat on the viability of its flagship Nabucco gas project to Central Asia despite Russia’s dealmaking in the region, with the European Commission appointing a special coordinator to accelerate progress on the pipeline, reported EUobserver.
Commissioner Andris Piebalgs told EUobserver at an energy conference in Istanbul this week that "The role of this coordinator will be to look upon what conditions need to be fulfilled from the EU side to really accelerate the process."
"I know we have some difficulties with the sources, and it is not the EU who negotiates the gas contracts, but the companies, but if there is investment needed, from the European Investment Bank or the EBRD [European Bank for Reconstruction and Development], it is definitely a task he could fulfill."
The Nabucco project is currently held back by the difficulties in "finding the gas to fill the pipeline" the commisioner said, but both Turkey and the EU are committed to start constructing the 3,300 km long pipeline by the beginning of 2008.
The Nabucco pipeline, an alternative route to the Russian gas grid, was originally designed to bring Iranian gas through Turkey, Bulgaria, Romania and Hungary to the Austrian gas hub in Baumgarten, which is plugged in to the European network.
Austrian company OMV, the main contractor, even signed a memorandum with Iran in this respect. But the deal has been blocked by the current political developments surrounding Iranian uranium enrichment.
The EU is together with EU candidate state Turkey looking for gas in the Caspian region as an alternative source, with Turkey wanting to become Europe’s fourth energy artery after Norway, Russia and Algeria.
One route where Brussels is putting its bets is the pipeline to the gas field Shah Deniz, in Azerbaijan."Shah Deniz is the only guarantee we have at this stage," said Mr Piebalgs, adding that "a very important event will take place next week, when the Turkish energy minister Hilmi Guler will visit Turkmenistan and Kazakhstan."
The Nabucco project has been put under a cloud by an 11 May GAS deal signed by Russia with Turkmenistan, Kazakhstan and Uzbekistan, which raised questions whether Moscow has not already blocked off access to gas reserves that the Europeans have their eyes on.
Mr Piebalgs indicated the Russian move "was an excellently staged confirmation" of Moscow’s interest in buying and investing in additional pipeline capacity. But he added that "as long as the countries are still open to other investments, even after the deal with Russia, I don’t see a reason to be discouraged."
On top of this, a second recent deal between Russia’s gas monopoly Gazprom and OMV regarding new storage facilities in Baumgarten, where the Nabucco pipeline is supposed to end, have also raised doubts about OMV’s and Austria’s commitment to non-Russian alternatives.
Wolfgang Ruttenstorfer, OMV’s CEO, restated his support for Nabucco at the Istanbul conference, however. "There is no connection whatsoever between the two. We also said it very clearly to our Russian partners that this is a fixed commitment. But Russia remains the main supplier for Central and Eastern Europe and that’s why it is necessary to have a good relationship with Gazprom," he told EUobserver.
Some Turkish experts take a harsher view of Russia’s tactics. "Nabucco almost came to a halt because of Russia’s pressure and therefore needs much more attention," Arzuhan Dogan Yalcindag, the chairwoman of the Turkish Industrialists and Businessmen’s Association (TUSIAD), said.
Gazprom is planning an alternative project to the Nabucco pipeline, called Bluestream 2, which is to traverse Turkey toward southern Europe. The project would run along the existing route of the Blue Stream pipeline to Turkey, but then turn west to Europe. It will allow Gazprom to supply Italy, Greece and possibly Hungary and Bulgaria.