Monday, July 13, 2009

Europe gas pipeline deal agreed!

A natural gas pipeline in Kiev (file image)
The Nabucco line has no guaranteed supply of gas

Four European Union countries and Turkey have signed an agreement to construct the long-planned 3,300km Nabucco natural gas pipeline.

Once completed, the line will bring up to 31 billion cubic metres of gas a year from the Caspian and the Middle East across Turkey and into Europe.

It will give an important alternative energy supply to Russia, which already meets 30% of Europe's gas needs.

But much still remains to be agreed on, not least where the gas will come from.

Turkey's Prime Minister Recep Tayyip Erdogan said deal was an "historic moment".

The five countries - Turkey, Romania, Bulgaria, Hungary and Austria - have been working on the Nabucco project with the European Commission for seven years now.

But Monday's decision to sign the deal has still come as a surprise, said the BBC's David O'Byrne in Ankara.

He said that Turkey and the European Commission were still at loggerheads over how much gas Turkey would be able to take from the pipeline.

Our correspondent also said that it remained uncertain which countries would supply gas to the Nabucco scheme.

Following the signing, Mr Erdogan said that the legal framework for the construction of the pipeline would now be agreed within six months.

"The more steps we take [on realising the project], the more the interest of supplier countries will grow," he said.

Azerbaijan will be the main source of Nabucco's gas when the pipeline is opened, due by 2014.

However, two weeks ago, the country agreed to sell some of its gas to Russia, a move many understood as a warning to the Nabucco partners to sort out their differences or look elsewhere.

Iran, Iraq, Kazakhstan, Turkmenistan and Egypt are all considered potential suppliers to Nabucco in the longer term.

Meanwhile, Russia is planning two of its own new gas pipelines to Europe, the Nord Stream, which will run direct from Russia to Germany under the Baltic Sea, and the South Stream, which will run from southern Russia under the Black Sea to Bulgaria.


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