EU rules out funding Nabucco gas pipeline [fr] [de]

EU Energy Commissioner Andris Piebalgs said there will be no European funding for the Union's flagship pipeline project, turning down appeals from Hungary at a two-day 'Nabucco summit' in Budapest organised in the wake of the Russia-Ukraine gas crisis. EurActiv Hungary contributed to this article.

Speaking at the summit, Hungarian Prime Minister Ferenc Gyurcsány described Nabucco as an issue of national security and suggested that the EU should finance the strategic project. 

The summit's Hungarian host also called for an 'International Nabucco Board' to be established, and suggested that Budapest had the resources to host such an institution. He also stressed that the EU must make further commitments towards Nabucco's resource and transit countries, as they do not want to be mere suppliers. 

The two-day summit brought together heads of state and energy ministers from twelve countries, along with representatives of the European Commission and financial institutions, with the aim of re-launching the EU's flagship project in the wake of the Russia-Ukraine gas dispute. 

In a first set of comments, Piebalgs said "the voice of Prime Minister Gyurcsány will be heard". But later on, he made clear that the Union should not finance the pipeline. 

"I believe that we can facilitate getting loans" for the project, Piebalgs said, according to Reuters. However, he said the EU would "not go beyond it, because then it doesn't make sense, it's not anymore the consortium's project but a public-private partnership". 

"I'm not ready at this stage to even consider such a type of option," Piebalgs added.

The EU energy commissioner added that a number of open questions regarding Nabucco remained to be answered. If concrete answers are not given by May, the project would be in jeopardy, he warned.

No compensations for gas crisis either 

Gyurcsány also urged the EU to adopt a common position on the issue of compensation for the damage caused by the Russia-Ukraine gas row. He was very optimistic, saying "the member states of the European Union have understood that the damage is something we suffered together". "I urge the Czech Presidency and the Commission to organise that member states take common steps".

Speaking to EurActiv Hungary, Piebalgs said compensation issues are dealt with via commercial contracts. He pointed out that the Commission "needs to know the figures of the damages first" before it can take any kind of action. He also warned that compensation may prove very hard to obtain as each side blames the other. "Russia would say it is Ukraine's fault, and Ukraine would say it is Russia's fault," the commissioner said. 

(With agencies.) 

Positions

Speaking in Budapest, Czech Prime Minister Mirek Topolánek, whose country currently holds the rotating EU Presidency, warned against alternative projects to Nabucco at the summit. 

"The Nabucco gas pipeline is not a matter involving just a few companies or a handful of countries. It is a strategic project crucial for the economic prosperity and political independence of the whole of Europe. I can claim without hesitation that Nabucco is a project of paramount importance for the freedom of the continent!," Topolánek exclaimed. 

He then outlined his vision for the EU's energy priorities. "In the short term, Ukraine has distanced further from Europe and its bond with Russia has become tighter. As a result, the emancipation process in this strategically important country is under threat." 

"In the medium term, the crisis has brought arguments in favour of the construction of the Nord Stream and South Stream gas pipelines. These routes bypass Ukraine (as well as Central Europe) while maintaining the EU's high energy dependency on Russia. This is a direct threat to the Nabucco project and as such a potential means of realistically diversifying Europe’s gas sources could be lost." 

In the longer term, Topolánek said "the course taken by the crisis and Europe’s apparent vulnerability serve as a warning regarding the global competition for gas and other energies among the countries of Southeast Asia, India, China, Japan and Europe. In the future, Europe must speak with one voice and maintain a clear vision of its energy policy. My primary objective as President of the European Council is to lay the foundations of such a common policy and such a common vision."

Speaking at the summit, Turkish Energy Minister Hilmi Güler stressed his country's experience in realising energy projects, saying Turkey had already help build the Baku-Tbilisi-Ceyhan and the Baku-Erzurum pipelines. 

Güler offered a helping hand to European countries, saying: "We can even use our present network to start the Nabucco project." He also insisted on a Caspian Development Corporation that "would secure the necessary gas supplies for Turkey as well as for Europe". 

Romania keen on South Stream 

Romania, one of the potential Nabucco transit countries, is also in favour of Gazprom's South Stream pipeline, EurActiv Romania writes today. South Stream was not initially to cross Romanian territory, but Gazprom recently suggested that it should. However, as Romanian President Traian Basescu recently stated, Romania would prefer Nabucco to be built first. 

"As soon as we finish Nabucco, we are in favour of South Stream coming across our country," Basescu was quoted as saying. 

Bulgaria insists on European financing of Nabucco 

Bulgarian Prime Minister Sergei Stanishev was quoted by Focus agency as saying that Bulgaria and Hungary will ask the EU to fund the implementation of Nabucco. The Sofia Echo quoted Stanishev as saying that the Nabucco project would be a top issue at the European Council summit on 19-20 March 2009. 

Stanishev and his Czech colleague Mirek Topolánek, in his capacity as holder of the EU presidency, discussed a proposal to build a liquefied gas terminal off the Greek port of Kavala and link it to Bulgaria at Dimitrovgrad. The two prime ministers also discussed the common European energy policy and lessons learned from the gas crisis. 

Azerbaijan committed to the EU pipeline

Azerbaijan, a key potential supplier for the Nabucco natural gas pipeline, remains a supporter of the project and calls on participants to move the project forward, President Ilham Aliyev said on Tuesday. 

"As far as Nabucco is concerted, Azerbaijan has always been supportive to this project and today once again we'd like to declare that we continue to support," Aliyev told a conference on the project. 

Philippe Maystadt, president of the European Investment Bank, expressed interest in the project, but warned that more information would be needed to secure financing, agencies reported. The Financial Times wrote that EIB is prepared to finance up to 25% of Nabucco's cost, a commitment of more than 2Bn euros.

Next Steps

• By March: Countries participating in the project should issue their declaration of support. 
• May: Concrete responses to be given to open issues. 
• June: Intergovernmental conference on Nabucco could take place.