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EU, Sofia and Ankara agree on Caspian pipeline project
By Robert Koch
AFP
VIENNA
Petroleumworld.com 06 27 06
The European Union and the energy ministers of Austria, Hungary, Romania, Bulgaria and Turkey agreed Monday to go ahead with the construction of a pipeline that will enable Europe to reduce its dependence on Russian gas.
In a joint declaration and in the presence of EU Energy Commissioner Andris Piebalgs, the ministers agreed to build the 3,300-kilometre long Nabucco pipeline that will guarantee the supply of about 30 billion cubic metres of gas a year from Iran to Central Europe by 2015.
Five companies -- Turkey's Botas, Bulgaria's Bulgargaz, Transgaz of Romania, Hungary's Mol and the Austrian OMV Gas -- have formed a joint venture, Nabucco Gas Pipeline International, to carry the gas from Iranian fields in the Caspian Sea to Central and Western Europe.
The cost of the pipeline is estimated at 4.6 billion euros (5.8 billion dollars).
According to predictions by the European Commission, which financed a pipeline feasability study, between 10 and 15 percent of the EU's gas supply will come from the Caspian Sea region by 2025.
The final decision on the start of construction should be made in 2007 with work expected to finish in 2011.
First, the regulation of third-party access (TPA) to the pipeline, which is subject to a European directive, will have to be resolved. Third-party access concerns the rights of companies outside of the joint venture to gain access to the pipeline infrastructure.
The gas crisis that erupted in January between Russia and Ukraine showed the need to find new sources of energy and new means of transport, Piebalgs said.
For Austrian Energy Minister Martin Bartenstein, whose country holds the EU presidency until June 30, "Nabucco represents a key element in European energy policy."
According to him, Nabucco will not compete with the South European Gas Pipeline project which Russian gas giant Gazprom and Hungarian energy group Mol have agreed to develop jointly.
"Nabucco will cover only 10 percent of the EU's future gas needs and we will use all the supply possibilities on offer," Bartenstein said.
By 2025, the EU will need another 250 to 300 billion cubic metres of additional gas, the minister said. The EU currently uses about 500 billion cubic metres of gas.
For Piebalgs, the South European Pipeline project is "still not concrete enough" to be taken into account. "We have to concentrate on Nabucco," he added.
In late April, Gazprom, the world's biggest oil and gas producer and exporter, threatened to look to other markets outside Europe for its exports.
OMV Gas Director Otto Musilek recently also said that "Europe's gas needs will increase enormously and Russia will not be able to handle them alone," adding that it was important to have access to the world's second-largest gas reserves in Iran.
Experts estimate the Middle East's total gas reserves at some 80,000 billion cubic metres.
AFP 26 1727 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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