A good side to high oil prices
Speaking at a round table organised by the Centre for European Policy Studies (CEPS), Wolfgand Ruttenstorfer, the CEO of OMV, and Mathias Ruete, the European Commission's Director General for Energy and Transport, agreed that high oil prices are making energy efficiency and environmentally-friendly policies less and less expensive, and could also favour the realisation of pipeline projects, necessary to guarantee Europe's energy security. They cautioned that gas diversification in Europe can come only through the Nabucco project.
Russia reliable supplier
Russia is a very reliable supplier, Ruttenstorfer said, but added that the concerns are that Russia will not be able to cover all Europe's additional needs, which in his words could be 100-150 billion cubic metres over the next one or two decades.
"Therefore our commitment is to build the Nabucco pipeline, to get direct access to the gas resources of the Caspian area, and tomorrow to the resources of Iraq and Iran. Huge resources are in Russia, but even bigger are in the area of the Caspian Sea and in the Middle East and Europe is in a very happy position, because in front of our house there are all those reserves," Ruttenstorfer said.
Mathias Ruete said estimations substantially differ in terms of Europe's actual import needs in the future.
"If we look at scenarios from Eurogas, we will need to build not only South Stream, North Stream, Nabucco, but also a number of other pipelines," Ruete said. He also hinted that for the EU, Nabucco is not an alternative to supplies from Russia but a necessary additional channel of supply.
Not enough gas to fill the pipe?
But Nabucco will not see the light of day if we cannot fill the pipeline, warned Ruttenstorfer. "We think it can, that there is enough gas in Azerbaijan, Turkmenistan, but we also hope that Iraq and Iran will come into the equation. It all depends on the overall foreign policy scenario that you can imagine. For the final investment decision, what is needed is definitely more than 10 Bn up to 15 Bn (cubic metres) for the first couple of years, but then eventually from 25 to 30. We will develop it stages and build the compressor stations accordingly," Ruttenstorfer explained.
The OMV CEO also described the current status of the Nabucco project. Six companies are currently in the group, since RWE from Germany recently joined. The next important stage is to reach an agreement with Turkey on the conditions under which Ankara would be prepared to let the gas cross its territory, and an agreement can possibly be signed in autumn. Then Nabucco will invite potential transporters and customers to declare how much they intend to transport and during which periods of time. Based on that, the final investment decision can be taken.