EU boost to Caspian gas pipeline plan

Plans to create a gas pipeline linking the Caspian Sea and Europe have been given a political boost after EU ministers pledged political support for the €4.6bn project.

EU energy chief Andris Piebalgs and energy ministers from the five countries that will be linked by the pipeline - Austria, Hungary, Romania, Bulgaria and Turkey – agreed in a joint statement in Vienna on Monday to support and “successfully complete” the 3300km Nabucco gas pipeline project.

“Gas is essential to the European economy. The European commission is actively guiding investments into transmission and is hoping to assist in overcoming the technical and commercial issues involved in bringing gas through many jurisdictions to the EU,” said Piebalgs.

“The Nabucco gas pipeline is one of the most important European energy projects, which allows the EU to diversify its transport routes and gas supplier countries,” added Austria’s economy minister Martin Bartenstein.

Political enthusiasm for the Nabucco project has increased as Europe’s leaders look to diversify energy supplies away from Russia.

Europe’s uneasy dependence on Russian oil and gas was highlighted last winter when a Russia/Ukraine spat over pricing temporarily cut supplies to western Europe.

The Nabucco pipeline will be supplied with gas from Azerbaijan.

EU leaders have made energy diversification one of their top political priorities. Monday’s public backing of the Nabucco project - ahead of a July G8 summit in St Petersburg on energy security and Moscow’s role as an oil and gas supplier - will send a strong signal of EU intentions to the Kremlin.

Moscow’s state-owned gas monopoly Gazprom opposes the Nabucco plan, and is scouting for investors for its own pipeline deal, an extension to its Blue Stream pipeline through the Balkans to Hungary.

The success of the Nabucco project will largely depend on whether the pipeline’s consortium can secure long-term access rights.  Backers want the EU to exempt rules forcing them to grant open access at regulated prices. 

During a short speech to ministers in Vienna, Piebalgs said he understood the consortium’s problems and hinted that exemptions could be agreed.

“It costs a lot of money for new infrastructure - and payback times for investments are very long. The coordination issues of gas infrastructure are particularly difficult, from the well head to the consumer; all issues must be coordinated and resolved in the proper order. These things are well understood in Brussels.”

And Piebalgs said the “time was right” for the Nabucco project.

“Over the past year we have seen the issue of security of energy supply become the issue of international relations,” said Piebalgs.

“Whereas previously the issue of security of supply was a technical issue reserved for the very specialised engineer or system operator, now the issue of energy security is on the table of every energy minister, as well as foreign, finance and industry ministers across Europe.”

“Nabucco concretely, [and] in all senses, contributes to our energy security.”

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