EU Energy Commissioner Asks Russia to Let Nabucco Live

Business » ENERGY | March 28, 2011, Monday // 17:07| Views: | Comments: 0
Bulgaria: EU Energy Commissioner Asks Russia to Let Nabucco Live European Commissioner for Energy, German, Gunther Oettinger has reversed somewhat his Nov 2010 statement admitting that Nabucco and South Stream are rival projects. Photo by EPA/BGNES

EU Energy Commissioner Gunther Oettinger has called upon Russia not to exert pressure to block the Nabucco gas pipeline project, a competitor of its own project South Stream.

Speaking at a news conference in Berlin on Monday, Oetting urged Russia not to pressure Central Asian countries, i.e. the potential natural gas suppliers for Nabucco, or the transit countries along its route.

He explicitly mentioned that the EU appreciates Russia as an energy supplier and partner but that in the case of Europe receiving natural gas deliveries from third countries, it is best to use the shortest route rather than transit the gas via Russia.

The Nabucco pipeline is the cornerstone of EU's strategy, or the so called "Southern Gas Corridor", to start tapping into the natural gas reserves of the Caspian Sea thus reducing its dependence on Russian energy.

What is more, Oettinger declared that Nabucco and the Russian-sponsored project South Stream are not direct competitors – somewhat of a reversal of a statement he made in November 2010.

While Nabucco and the Gazprom-sponsored gas transit pipeline are widely considered rival projects, EU Energy Commissioner Guenther Oettinger formally admitting in November 2010, the first such admission by an EU institution, that the two pipelines are competitors.

In January 2011, the EU made a "breakthrough" deal with Azerbaijan on the supply of natural gas to the Union from the Caucasus country and on the development of the so called Southern Gas Corridor with several major pipelines including Nabucco.

In January 2011, the EU made a "breakthrough" deal with Azerbaijan on the supply of natural gas to the Union from the Caucasus country and on the development of the so called Southern Gas Corridor with several major pipelines including Nabucco.

The President of the European Commission Jos? Manuel Barroso and the President of Azerbaijan Ilham Aliyev signed in Baku a Joint Declaration on gas delivery for Europe.

Under its terms, Azerbaijan for the first time commited in an official written document to supplying substantial volumes of gas over the long term to the European Union, while Europe provides access to its market for them.

Azerbaijan, together with Iraqi Kurdistan, will be the major initial supplier of natural gas for the Nabucco gas transit pipeline. In November 2010, Turkmenistan announced it was ready to provide the project with more natural gas that it can handle, a revolutionary statement of Turkmenistan's First Deputy Prime Minister Baymurad Khojamukhamedov described the Nabucco Consortium as very promising leaving the Nabucco Consortium convinced that it will strike a supply contract with Turkmenistan.

The Nabucco pipeline is planned to be 3 300 km (1,800-mile), will have a capacity of 31 billion cubic meters of natural gas annually, and will cost EUR 7.9 B. ITGI will cost a total of EUR 2.5 B and will have a total capacity of 11 billion cubic meters.

South Stream is a proposed gas pipeline to transport Russian natural gas to the Black Sea to Bulgaria and further to Italy and Austria. The project would partly replace the planned extension of Blue Stream from Turkey through Bulgaria and Serbia to Hungary and Austria, and is seen as rival to the planned Nabucco pipeline.

In November, after months of exhausting talks, Bulgaria and Russia signed an intergovernmental agreement for the construction of the Bulgarian section of the South Stream gas transit pipeline in the presence of their Prime Ministers, Boyko Borisov and Vladimir Putin, in Sofia. The ownership of the Russian-Bulgarian joint company to build and manage the Bulgarian South Stream section will be split 50-50%.

The South Stream gas transit pipeline is supposed to be ready by 2015. Its construction is expected to cost between EUR 19 B and EUR 24 B. It will be transporting 63 billion cubic meters of natural gas annually, or 35% of Russia's total annual natural gas export to Europe.

The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria's Varna; the underwater section will be 900 km long.

In Bulgaria, the pipe is supposed to split in two - one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.

The project was initiated by Gazprom and the Italian company Eni, and the French company EdF is also planned to join as a shareholder. It is seen as a competitor to the EU-sponsored project Nabucco seeking to bring non-Russian gas to Europe.

In a joint statement in late March 2011, Wintershall and Russian natural gas monopoly Gazprom OAO announced that oil and gas company Wintershall AG - a unit of German chemicals giant BASF SE - will take a 15% stake in the South Stream gas pipeline projec

Gazprom will retain its 50% stake in the South Stream project, the statement added.

At present the South Stream venture is owned 50:50 by Italy's ENI SpA and Gazprom. Electricite de France SA is to take a 10% stake in it later in 2011.

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Tags: Nabucco Gas Pipeline International, Nabucco, South stream, gas transit pipeline, natural gas, Russia, azerbaijan, Gunther Oettinger, EU Commissioner for Energy
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