Azerbaijan President in Bulgaria: Nabucco Has Long Way to Go

Bulgaria and Azerbaijan signed two energy cooperation memorandums in Sofia Friday in the presence of the two country’s Presidents, Georgi Parvanov, and Ilham Aliyev.

One of the documents was signed by Bulgaria’s Ministry of Economy, Energy, and Tourism, and Azerbaijan’s Ministry of Energy and Industry, the other one – by Bulgartransgaz, subsidiary of Bulgaria’s gas monopoly Bulgargaz, and the Azerbaijan state company GNKAR.

According to them, Azerbaijan is going to supply Bulgarian with 1 billion cubic meters per year. The gas deliveries will start the moment Bulgaria constructs a pipe connecting it to the Turkey-Greece-Italy pipeline.

“I would not dare to mention a specific date, this is a multilateral project which does not depend only on Bulgaria and Azerbaijan,” Bulgaria’s President said to a question about when Nabucco was expected to be completed.

He added that the bilateral memorandums for cooperation signed Friday could be viewed as part of the efforts to start Nabucco because they could be integrated within it.

Azerbaijan’s President, Ilham Aliyev, outlined three groups of problems for the realization of the EU-sponsored Nabucco gas transit pipeline.

“We have always supported Nabucco, and our position remains unchanged... But there is a whole complex of issues which have to be resolved before Nabucco could be realized,” Aliyev declared.

In his words, the first group has to do with the securing of the natural gas supply. The Azerbaijan President said his country alone had sufficient amounts of gas – estimated reserves of 2 trillion cubic meters.

The second group of problems for Nabucco, which remain largely unresolved, has to do with transit. The third group of issues concerns funding. According to Azerbaijan’s leader, some funds have already been allocated but the project requires a lot more money, so solutions there have to be found as well.

The Nabucco gas transit pipeline is supposed to bring natural gas supplies from the Caspian region and the Middle East to the EU. It will have a total length of 3 300 km, and is expected to cost about EUR 8 B.

Despite its considerable natural gas reserves, Azerbaijan is expected to have additional production sufficient to provide much of the quantities needed to fuel the Nabucco pipe only after in the second phase of the exploitation of the Shah Deniz gas field. According to experts, this is expected to provide some 8-10 billion cubic meters of gas additionally per year.

Yet, since Nabucco will have a capacity of 31 billion cubic meters per year, other suppliers will be needed. Possible choices are Egypt, Iraq, and Turkmenistan (whole involvement would necessitate the construction of pipeline through the Caspian Sea to which Iran or Russia might be opposed). According to most estimates, Nabucco is going to be in operation in 2014-2016.