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27/07/2016

Bulgaria wants to revive Nabucco, Azerbaijan says pipeline name ‘not important’

Energy

Bulgaria wants to revive Nabucco, Azerbaijan says pipeline name ‘not important’

President Ilham Aliyev and PM Boyko Borissov [Presidency of Azerbaijan]

Hosting the President of Azerbaijan on an official visit to Bulgaria, Prime Minister Boyko Borissov said his country wants to revive the Nabucco pipeline project. President Ilham Aliyev said that what really matters is to bring more Azeri gas to Europe, and that the name of the future pipeline is not important.

Bulgaria wants the European Commission to revive plans for the Nabucco pipeline that would bring gas from the Shah Deniz gas field in the Azeri territorial waters of the Caspian Sea, Borissov said Wednesday (4 March), following talks with Aliyev.

Keen to diversify its energy supplies due to the Ukraine crisis, Bulgaria meets more than 80% of its gas needs with imports from Russia.

Sofia was caught off guard by President Vladimir Putin’s surprise announcement in December that Russia was abandoning plans for the South Stream pipeline that would have supplied gas to Europe via Bulgaria, while bypassing Ukraine.

On a recent visit to Brussels, Borissov even warned of an “energy catastrophe” looming for his country.

>> Read: Borissov warns of Bulgarian energy ‘catastrophe’

“We want to revive the Nabucco project, more specifically the stretch that goes through Bulgaria. Our country is an extremely loyal EU member and has implemented all legal requirements of the Third Energy Package, unlike many other countries. Therefore, together with President Aliyev, we will present the revival project to the European Commission,” Borissov said, according to an official transcript.

Both Nabucco and South Stream were designed to pass through Bulgarian territory. Nabucco was originally an American project to bring gas to Europe from sources other than Russia, an idea strongly resented by Moscow. Gazprom partially put forward the South Stream project (see background) with the purpose of rendering Nabucco irrelevant, at it would bring gas through largely the same route to the same gas hub of Baumgarten, in Austria.

But in 2013, Azerbaijan chose another pipeline project, the Trans-Adriatic pipeline TAP, which will bring the Azeri gas from Turkey via Greece and Albania to Italy, and the Nabucco project was shelved.

>> Read: EU-backed Nabucco project ‘over’ after rival pipeline wins Azeri gas bid

Initially, the Shah Deniz gas field would produce 16 billion of cubic metres of gas per year (bcm/y), of which 6 billion will be used by Turkey and 10 billion would be delivered through the TAP pipeline to European countries. Bulgaria would first receive 1 bcm/y of Azeri gas, through an interconnector from Greece, after the project becomes operational in 2019-2020.

From Bulgaria, Azeri gas could also be sent to Romania and Hungary, Aliyev said.

The amount of Azeri gas to be delivered remains modest compared to the plans to bring 63 bcm/y of Russian gas to Europe through the South Stream or the Turkish Stream pipeline, possibly even earlier than the TAP pipeline. But Aliyev said in Sofia that Azerbaijan has rich gas resources, specifying a total amount of gas reserves of 2.5 trillion cubic metres. After the Shah Deniz gas field, the Absheron gas field is expected to be developed next.

“Azerbaijan is not under sanctions. There is no problem for us to raise the issue with Brussels,” Borissov said, referring to his idea of resuscitating the Nabucco pipeline. He also expressed appreciation for the Azeri proposal that Bulgaria becomes a shareholder in the Southern gas corridor.

Dnevnik, the EurActiv partner in Bulgaria, quotes Borissov as stating that together with Aliyev, he would go to Brussels to present the project to revive Nabucco.

The Southern gas corridor is a jargon term referring to the three pipelines which will bring Azeri gas: the South Caucasus Pipeline Extension from Shah Deniz via Azerbaijan and Georgia, the TANAP pipeline via Turkey, and the TAP pipeline starting from Greece.

“We think that we can unite TAP and Nabucco. It is not important what you call this route. Our main goal is that the volumes of Azeri gas enter Europe,” Aliyev said. “The more EU countries receive our gas, the better for all.” 

Borissov also said that Bulgaria doesn’t give up the South Stream project.

“The pipes are still there,” he said, referring to the pipes for the offshore section of South Stream which are stocked in Bulgarian ports. He added: “Up to today, we have no written notification that South Stream has been cancelled. We have kept the Nabucco project as an alternative.”

Background

EU flagship project Nabucco was designed to supply Europe with energy from the Caucasus and give the Middle East a gas hub in Austria, via Turkey, Bulgaria and Romania.

The construction of Nabucco was expected to start in 2013, and the first gas was expected to flow in 2017. As planned, the pipeline would carry 31 billions of cubic metres per year (bcm/y) of gas.

But now, only three smaller pipeline projects appear to be in competition to bring gas from the Turkish-EU border deeper into the European Union:

  • Nabucco West: via Bulgaria and Romania to Austria
  • South East Europe Pipeline (SEEP): via Bulgaria and Romania to Hungary
  • Trans-Adriatic Pipeline (TAP): via Greece to Italy

South Stream is a Russian-sponsored natural gas pipeline project. As initially planned, the pipeline would run under the Black Sea to Bulgaria, and continue through Serbia with two branches to Bosnia and Herzegovina and to Croatia. From Serbia, the pipeline crosses Hungary and Slovenia before reaching Italy. Its planned capacity is 63 billion cubic metres per year (bcm/y). It's status currently under review, with Moscow having announced its suspension. Rumors persist that South Stream is not been shelved.

The Commission pressured Bulgaria to freeze South Stream, citing breaches to EU law in the intergovernmental agreement for the construction of the pipeline.

>> Read: Barroso warns Bulgaria on South Stream

Further Reading