EU, Turkey sign gas transit agreement for Nabucco pipeline

13 July 2009 14:04  [Source: ICIS news]

PRAGUE (ICIS news)--EU governments and Turkey have signed a long-awaited natural gas transit agreement for the proposed Nabucco pipeline, the European Commission said on Monday.

“I sincerely believe we are starting to confound the sceptics, the unbelievers,” said Jose Manuel Barroso, the Commission’s president, following the signing of the accord in Ankara.

“Some time ago people said that this project would not go ahead, that the negotiations seemed irrevocably blocked. Now we have an agreement and I believe this pipeline is now inevitable rather than just probable,” he added.

In his speech at the signing ceremony, Turkish Prime Minister Recep Tayyip Erdogan said: “The Nabucco project has been labelled a pipe dream. This project will be a success story to prove the doubters wrong.”

The €7.9bn ($10.9bn) pipeline, backed by the EU and the US as a means of reducing Europe's overreliance on unstable Russian gas supplies, should supply Europe with gas from the Caspian Sea region and the Middle East.

Transit countries Turkey, Bulgaria, Romania, Hungary and Austria signed the accord after several years of delay.

OMV of Austria, MOL of Hungary, Bulgargaz of Bulgaria, Transgaz of Romania, RWE of Germany and BOTAŞ of Turkey are the six members of the Nabucco Gas Pipeline International consortium.

Erdogan said he hoped that Iranian gas might flow through the pipeline when political conditions allowed for it.

The US is against Iran becoming a Nabucco supplier until relations between Washington and Tehran are normalised.

The Nabucco partners aim to pump 31bn cubic metres of natural gas to Europe by 2014.

Last week, the Nabucco consortium said a “realistic scenario” was for Azerbaijan and Iraq to each supply 7bn-8bn cubic metres of gas per year, with Egypt contributing 1bn-2bn cubic metres per year.

Russia and Turkmenistan are other possible sources for gas, the consortium said.

However, analysts note that no actual contracts for gas supplies have yet been concluded.

Russia could prove to be a rival buyer for much of the available gas for its projects, including the envisaged South Stream pipeline that, like Nabucco, would run to Europe across a “southern corridor”.

($1 = €0.72)

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By: Will Conroy
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