Russian gas pipeline could doom Europe's Nabucco plan

Reuters


* Europe, U.S. support for Nabucco weakened
* Azeri consortium expected to pick winner in June
* Gas due to flow to European Union from 2019

Europe's grand plan for a gas pipeline from the Caspian Sea that would make its eastern states less reliant on Russia may have been fatally undermined by Russia's even bigger project.

As Azerbaijan nears a decision on which pipeline to choose for its future exports, the Nabucco plan that was long the European Union favourite could lose out to the more modest Trans Adriatic Pipeline (TAP) across Greece to southern Italy.

In a complex equation based on politics as much as economics, TAP is in the ascendancy over the Nabucco pipeline to Austria in the face of Russia's $39 billion South Stream plan.

"The question is: 'Is Nabucco viable if South Stream is built?'" said Andrew Neff, Moscow-based principal energy analyst with research firm IHS.

The decision between TAP and Nabucco is expected in June from partners in the Shah Deniz consortium, led by gas field operator BP and Azeri state energy company Socar.

The European Union won't have a direct say in the choice, but its recent switch to "project neutrality" from support for Nabucco could make a big difference. It now says it would be happy with either pipeline or even both.

"There has been a dramatic shift," TAP's External Affairs Director Michael Hoffmann told Reuters.

Nabucco spokesman Christian Dolezal, however, said his project retained strong political support.

Turkey sees promise in pivoting north

Black Sea Countries and transportation routes on the map

Catherine Stupp    Christian Science Monitor

With its attempts to join the EU stalled and its leadership role in the Middle East marred by Syria's conflict, Turkey is turning its attention to a less tumultuous border – the Black Sea.

Istanbul, Turkey - Its protracted bid to join the European Union remains stalled and its "zero problems" policy in the Middle East is cracking over support for Syria's opposition. But one foreign policy front retains promise for Turkey: the Black Sea. 

Nowhere is it more evident than the busy industrial city of Trabzon in northeastern Turkey, a regional trade hub because of its location on roads that connect it to both Istanbul and other cities to the east. The cobblestone streets of the city center are bustling with buses and private cars carrying passengers to Georgia, only 125 miles to the northeast, as well as trucks shipping goods across the region via the highway that cuts through the city.

If plans for a highway connecting the 12 countries bordering the Black Sea go forward, Trabzon's growth – and Turkey's growing stance as a regional leader – is poised to surge.

Turkey’s Black Sea coast, far from its tumultuous southern border, offers a promising contrast its more troubled efforts to join the EU and to expand networks in the Middle East. Ankara has emerged as the dominant initiator of regional cooperation, institutionalized by the Black Sea Economic Cooperation (BSEC), which was founded on the heels of the collapse of the Soviet Union.

Filling the Soviet vacuum

Although Turkey was one of 10 founding members, it played a leading role in BSEC's establishment, and the organization's permanent headquarters is still located in Istanbul.

One more gas pipeline to be built for Shah Deniz gas transportation

 

Rufat ABBASOV     News.Az

 

There is a plan to lay an additional pipeline on par with existing South Caucasus gas corridor. 

 

Existing or new infrastructure will be used to transport Azerbaijani gas produced within the framework of Stage 2 of the Shah Deniz field development, according to the report of BP-Azerbaijan for 2010.

The report says the company is currently evaluating all existing variants and defining the route meeting all demands of the concerned parties. “A negotiation export group from among the representatives of BP, SOCAR, Statoil and Total was created to negotiate with Turkish and European gas consumers”, the report says.

Earlier, the president of BP-Azerbaijan Rashid Javanshir said there is a need to expand existing transport infrastructure to ensure export of gas within the framework of the second phase of the Shah Deniz field development.