European gas pipeline deal signed

Pipeline through Turkey is aimed at reducing Europe’s reliance on Russian supplies.

Nabucco pipeline signing deal, Ankara, Turkey
Barroso said the project could open the door to a new era in relations between Turkey and the EU [AFP]

The project is aimed to avoiding a repetition of supply cuts that disrupted Russian supplies to Europe last winter, during an energy dispute between Ukraine and Moscow.

About one quarter of all gas used in Europe currently comes from Russia, with several southern European countries depending almost exclusively on Russian supplies.

‘Important milestone’

But Ferran Tarradellas, the EU energy commissioner’s spokesman, told Al Jazeera that the principle purpose of the project was not to freeze Russia out of the European gas market.

“Nabucco is not a project against against Russia. The competition is good for everybody, we don’t want to exclude anybody”

Ferran Tarradellas, EU energy commissioner’s spokesman

“Nabucco is not a project against against Russia. The competition is good for everybody, we don’t want to exclude anybody,” he said

Tarradellas said that Monday’s signing ceremony in Ankara, the Turkish capital, was “a very important milestone”.

“This is going to solve all the legal and regulatory aspects of the project,” he said.

Nabucco is in direct competition with Russia’s South Stream project, which will carry gas through Bulgaria to Western Europe under the Black Sea.

Recep Tayyip Erdogan, the Turkish prime minister, said that Russia and Iran even join the project “when conditions allow”.

The project appeared to get a boost on Friday when Turkmenistan said it was prepared to supply Nabucco with gas, despite its earlier reluctance.

But to feed Nabucco, however, Turkmen gas would have to be brought across the Caspian Sea to its western shore in Azerbaijan.

Azerbaijan is seen as the primary potential provider of gas for the pipeline, with Iraq, Syria and Egypt saying that they were intrested in contributing to Nabucco.

Azerbaijan insists it has enough reserves for the project, but last month it raised concerns among Nabucco proponents by signing a deal to export gas to Russia starting in 2010.

Turkey concerns

The project has been delayed by Turkish demands to use 15 per cent of Nabucco’s gas for domestic use or for re-export.

EU officials said Ankara’s concerns were to be addressed by an arrangement under which the pipeline would operate both ways, giving Turkey access to European stockpiles in times of need.

Bajnai warned of ‘extremely difficult moments in the coming years’ [AFP]

Erdogan said the pipeline “will elevate Turkey to a significant position” for European energy security and help boost its struggling EU membership bid.

Barroso praised Turkey’s role, saying the project “could open the door to a new era in relations between Turkey and the EU, and beyond”.

“Sometime ago people said the project would not go ahead. I believe this pipeline is now inevitable rather than just probable,” he said.

However, Gordon Bajnai, the Hungarian prime minister, warned of “extremely difficult moments in the coming years that will require the highest level of commitment”.

Two European banks have expressed readiness to finance the project, but analysts say securing the cost could be difficult in  the global economic slowdown and uncertainty over suppliers.

The pipeline’s shareholders are Austria’s OMV, Turkey’s Botas, Bulgaria’s Bulgargaz, Hungary’s MOL, Romania’s Transgaz and Germany’s RWE.

Source: Al Jazeera