EU: Nabucco Looks To Middle East For Gas

BRUSSELS -- Worried about its dependency on Russian natural gas, EU officials have met in Brussels with energy officials from Turkey and six Mideast countries in an effort to fill Nabucco, a planned gas pipeline running from Turkey to Austria and beyond.

The European Union's external relations commissioner, Benita Ferrero-Waldner, said the bloc is now "looking south" after the May 5 meeting.

"Too many people still think we only look north and east when we think of our energy security," she said.

So far, the EU has Azerbaijan as a potential supplier for Nabucco, although Baku's export capacity remains unclear.

Turkmenistan last month promised 10 billion cubic meters (bcm) a year, but there are, as yet, no means of getting the gas to Nabucco. The most likely option is a pipeline across the Caspian Sea to Azerbaijan, but the plans for such a project have not even reached the drawing board.

Arab Consortium

On May 5, Iraq reconfirmed an earlier pledge of 5 bcm to the EU a year. Egypt, Jordan, Lebanon, and Syria -- which make up the Arab Gas Pipeline consortium -- said they would provide another 2 bcm. It has yet to be decided whether the Iraqi deliveries would join the Arab Gas Pipeline via Syria or whether a new pipeline will be built connecting Iraq directly with Turkey. Officials said the Arab Gas Pipeline will be online by early 2010, whereas it will take two to three years for the Iraqi gas to reach Europe.

In more good news for Europe, EU Energy Commissioner Andris Piebalgs said Turkey has given "clear confirmation" that it agrees to a straightforward transit role. The EU had worried that Turkey could choose the Russian option of buying up gas at one border and selling it at another, which would give it a virtual free hand to set prices and dictate other terms.

Slowly, the figures are beginning to add up for Nabucco. Piebalgs says he expects the pipeline to go online in five to six years. But even Nabucco at its full capacity of 30 bcm would represent a drop in the ocean of the EU's total annual consumption of gas, which is roughly 600 bcm. One-fourth of that amount is currently being supplied by Russia's Gazprom, and the EU does not want this ratio to increase.

Piebalgs denied reports that the Nabucco consortium is in talks with Gazprom as another potential supplier. "Russia works with its own project, South Stream," he said. "They have never expressed any wish to join Nabucco, and I think we should not ask Russia to join a project they have not shown [any] interest to join."

Ferrero-Waldner said the whole strategy behind Nabucco is diversification -- the bringing into play of other suppliers besides Russia.

Piebalgs, who had just returned from talks with Russian officials in Moscow, also provided some insight into Gazprom's South Stream project, which will run via the Black Sea to Bulgaria and ultimately to Italy. He said only 10 bcm of South Stream's annual capacity would come from new Russian sources, whereas 20 percent would be diverted from existing transit routes.