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24/08/2016

Nabucco pipeline confirms feeder lines to Iraq, Georgia

Energy

Nabucco pipeline confirms feeder lines to Iraq, Georgia

pipeline_pic_isp_Peter_Ingvorsen.jpg

The Nabucco pipeline project has taken another step forward by ordering engineering work for two feeder lines from Turkey to Iraq and Georgia. However, a third planned feeder line from Turkey to Iran has been put on the back-burner due to political considerations, the consortium announced.

At a recent Steering Committee meeting in Ankara, Nabucco shareholders agreed to modify the feeder line concept, a press release says. Due to the current political situation, they decided to put on hold  the third feeder line to the Turkish-Iran border.

There will be feeder lines to the Turkish-Georgian and Turkish-Iraqi borders. The planned route offers a wide range of supply sources for the Nabucco gas pipeline, which will receive gas from Azerbaijan, Turkmenistan and Iraq, the Nabucco consortium announced.

Indeed, recently Azerbaijan and Turkey signed a deal to ship 11 billion cubic metres of Azeri gas per year to Turkey. Shipments will start in 2017 and some of the gas may be pumped into Nabucco. Meanwhile, northern Iraq declared in Turkey that it stands ready to provide gas supplies "to make Nabucco work" (EurActiv 08/06/10).

The consortium also announced that it would raise its capacity step-by-step, from 8-10bcm/y and reaching maximum capacity by 2018 after the construction of additional compressor stations (see 'Background').

In the meantime, public hearings have been taking place in Turkey within communities, followed by question-and-answer sessions regarding the local impact of the project. According to the consortium, such  meetings have already taken place in the cities of Ankara, Eski?ehir, Bursa, Balikesir, Tekirda? and K?rklareli.

It was recently announced that Nabucco's main competitor, Gazprom-favoured South Stream, had tried to unsettle its rival by enlisting German utility RWE, which is already a Nabucco partner, as one of its members (EurActiv 12/07/10).  Later, Gazprom denied having made such an invitation.

Positions

It is clear that South Stream is still far from being a reality and that the Russians are grossly exaggerating, maybe even deluding themselves on some issues, writes Amanda Paul of the European Policy Centre in an article for Turkish daily Zaman.

"While Russia may claim to have all the necessary gas, it is clear they do not. When asked specifically about this, Gazprom always fails to identify specific gas sources. They are also unable to give hard evidence of where the funding will come from for the estimated $30 billion cost of this project," Paul argues.

While Russia continues to claim that South Stream has plenty of EU support, this is not true, she writes.

"For example, Germany, one of Russia's closest friends in the EU, has not given any support either financially or politically for South Steam, which has come as something of a blow for the men in the Kremlin. Indeed, Germany has expressed concerns about the project at times, including when Russia moved to get German energy giant RWE on board," she says. 

"And, on the other hand, while Germany has not been the most ardent supporter of Nabucco, German Chancellor Angela Merkel did travel to Kazakhstan recently and raised the issue of gas supply for Nabucco with President Nursultan Nazarbayev, as well as for other planned southern energy corridor projects," Paul adds.

Background

South Stream is a Russia-sponsored planned natural gas pipeline. Once completed, the pipeline will run under the Black Sea to Bulgaria, with one branch going to Greece and Italy, and another to Romania, Serbia, Hungary, Slovenia and Austria. Russia recently announced that it would more than double its planned capacity from 31 billion cubic metres per year (bcm/y) to 63 bcm/y (EurActiv 18/05/09 and EurActiv 25/05/09).

The key partner for Russia's Gazprom in the South Stream project is Italy's largest energy company, ENI (EurActiv 18/05/09).

Another pipeline in the project phase, Nabucco, does not enjoy the favour of Russian state monopoly Gazprom. It widely resembles South Stream, but is intended to diversify the EU's pool of supplier countries, bringing gas to Europe from the Caucasus and the Middle East to a gas hub in Austria, via Turkey, Bulgaria and Romania.

The construction of the pipeline is expected to start in 2011 and the first gas is expected to flow in 2014. The pipeline will carry 31 billion cubic metres of gas per year, but this maximum capacity will only be reached in 2018. Investment in the pipeline totals 7.9 billion euro.

The Nabucco consortium comprises leading European energy companies: OMV of Austria, MOL of Hungary, RWE of Germany, BEH (Bulgaria Energy Holding) of Bulgaria, Transgaz of Romania and Botas of Turkey. But three consortium members - OMV, MOL and Bulgargaz, the initial Bulgarian partner - have already signed up to Gazprom's South Stream pipeline, raising questions about potential conflicts of interest and indeed their commitment to Nabucco.

Nabucco and South Stream are seen as competing projects and have similar timeframes for beginning and completing construction.

Timeline

  • 2011: Construction of Nabucco gas pipeline to begin.

Further Reading