MOSCOW. (RIA Novosti economic commentator Oleg Mityayev) - Four EU states and Turkey signed an agreement on July 13 in Ankara paving the way for the Nabucco pipeline to transport gas to Europe bypassing Russia.
The pipeline could become a serious rival to Russia's South Stream, which is designed to bring gas to south and central Europe. Bulgaria, which is involved in both projects, is planning to bargain for better terms under energy agreements with Russia.
The agreement, signed in Ankara by Austria, Hungary, Bulgaria, Romania and Turkey, stipulates building a 3,300 km (2,051 mile) pipeline with a throughput capacity of 31 billion cubic meters annually between Erzurum in eastern Turkey and Austria's gas distribution hub at Baumgarten across Bulgaria, Romania and Hungary. The 7.9 billion euro project is to be commissioned in 2015-2016.
The signing of the agreement has been postponed several times because Turkey demanded that 15% of the gas to be shipped through the pipeline must be sold to it at a discount. But the demand made Europe's main gas project unprofitable, and eventually the EU convinced Turkey to withdraw its demand.
Nabucco's other, and bigger, problem is a lack of gas. Project initiators now say that Nabucco will pump 8-10 billion cu m of natural gas annually in the first stage, mostly from Azerbaijan, but its capacity will be gradually increased. The Baku-Tbilisi-Erzurum pipeline has been built and commissioned.
Under the project, Nabucco is to receive 7-8 billion cu m from Azerbaijan annually by 2015, the same amount from Iran, and up to 2 billion cu m from Egypt. However, an Iranian spokesman said shortly before the signing of the agreement that his country did not have surplus gas for Nabucco, and that Iran would sell its gas on the domestic market.
Unexpectedly, Turkmenistan supported the project last Friday. President Gurbanguly Berdymukhamedov said that Turkmenistan, committed to diversifying its external energy routes, would use every available option to take part in large international projects, "such as Nabucco."
The Nabucco authors were happy, as they have always dreamed of linking Turkmenistan to Nabucco through the Trans-Caspian Pipeline, which is to link Turkmenistan with Azerbaijan across the Caspian Sea.
Under a 2003 agreement Russian energy giant Gazprom has the monopoly right to buy up to 50 billion cu m of Turkmen natural gas annually for 25 years. However, last spring Gazprom dramatically decreased the acquisition of Turkmen gas due to a decline in demand, actually pushing Turkmenistan toward Nabucco. But the Chinese proved to be faster than Europeans. A new pipeline with an annual capacity of 40 billion cu m to deliver Turkmen gas to China is to be commissioned as soon as this fall.
Without Turkmen gas, Russia may have problems with the South Stream pipeline, which would link Russia with Bulgaria along the Black Sea bottom. The cost of construction of the underwater section of the pipe has been estimated at $10 billion. Once in Bulgaria, the pipeline is to run in two directions, one leg to southern Italy via Greece, and the other to Austria via Serbia and Hungary.
The South Stream project has come across problems in Bulgaria, which will have a new government after the July 5 parliamentary elections. Sofia Mayor Boyko Borisov, whose party, Citizens for the European Development of Bulgaria (GERB), won the elections, has said that the talks on joint energy projects with Russia, including South Stream, should be suspended.
The new Bulgarian authorities will most likely demand more favorable terms now that Bulgaria has signed the Nabucco agreement.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
