Iran could hold the key to breaking the European Union's energy dependence on Russia, a senior European parliamentary official has told EurasiaNet.
Speaking ahead of a January 27 energy summit in Budapest that will focus on the potential construction of the Nabucco pipeline, Ona Jukneviciene, a top European official involved in Central Asia policy, suggested that the EU could not limit its options on Nabucco, if it hopes to achieve its long-standing aim of diversifying its sources of energy. The Nabucco route would allow natural gas to circumvent Russia on its way from the Caspian Basin and elsewhere to Western Europe. [For background see the Eurasia Insight archive].
Jukneviciene's statements put her at odds with EU heavyweights, including Energy Commissioner Andris Piebalgs and European Commission President Jose Manuel Barroso. Both have re-reiterated that Iran's participation in the Nabucco project is a non-starter. Jukneviciene is a member of the European parliament. She chairs the parliamentary cooperation committees dealing with Central Asian states and Mongolia.
Even if EU officials were united in the desire to seek Iranian participation in Nabucco, several substantial hurdles remain in the way of energy cooperation between Brussels and Tehran. Firstly, the EU and the United States are locked in a stand-off with Iran over Tehran's nuclear program. [For background see the Eurasia Insights]. In addition, existing US economic sanctions against Iran ensure that Washington would remain strong opposed to Iranian participation in Nabucco.
Representatives from a wide variety of former Soviet and Middle Eastern states -- including Turkmenistan, Azerbaijan, Georgia, Kazakhstan, Egypt, Iraq -- are expected to be in Budapest for the January 27 summit, which may determine Nabucco's fate. Azerbaijani President Ilham Aliyev, according to a report distributed by the Hungarian news agency MTI, urged meeting participants to establish a clear timetable for Nabucco's construction. US and EU officials are also in Budapest to help draw up a concrete action plan for the pipeline.
The much-discussed export route has been plagued by questions over whether it can operate profitably, if it is built. The amount of gas currently committed to the pipeline falls far short of the volumes needed to make it economically viable, and the financing needed to complete the mammoth engineering project is not yet in place. [For background see the Eurasia Insight archive].
Notably absent from Budapest are Iranian officials, who did not receive an invitation to attend the summit even though Mohammad-Reza Ne'matzadeh, the managing director of Iran's national oil company, has identified the Islamic Republic as Europe's "sole option" for filling the Nabucco line.
"The Nabucco project has a lot of potential, even though I see the problems which have been identified already, and this is of course related to transit through Turkey," Jukneviciene said. "And, of course, the capacity of Caspian gas is not sufficient for the pipeline and we have to attract Iranian gas. . . . This is the problem that the EU understands very well."
The pipeline has become increasingly politicized. Earlier in January, for example, Turkish Prime Recep Tayyip Erdogan suggested Ankara's support for Nabucco could be linked to Turkey's long-sought accession to the European club. [For background see the Eurasia Insight archive]. But the Turkish leader quickly backtracked when European leaders reacted harshly to his comments.
Erdogan also urged the EU to work with Iran to secure Nabucco's economic viability. "In the Nabucco project there needs to 30 billion cubic meters of natural gas flowing, but it's not there," Erdogan warned.
Members of the Nabucco consortium -- including Austria's OMV, German RWE AG, Hungary's MOL, Turkey's Botas, Romania's Transgaz, and Bulagria's Bulgargaz -- say the EU must take a higher-profile role on financing. The European Investment Bank announced January 26 that it would consider financing the project -- but conditioned its support on assurances that there would be enough gas supplies to make the pipeline financially viable.
Securing needed supplies can be accomplished only by engaging countries like Iran, Iraq, Turkmenistan or Egypt, according to Reinhard Mitschek, the managing director of the Nabucco consortium.
Jukneviciene suggested that private money, preferably from banks looking for sound long-term investments, should be found. "In light of the unfortunate global [financial] crisis, I think there is potential for this project in that I think banks will be looking for long term investments, which is Nabucco project," she said.
Negotiations with Turkmenistan are ongoing at both a diplomatic and commercial level. Bulgarian president, Georgi Parvanov, one of the pipeline's most vocal supporters, visited Ashgabat in early December to lobby on Nabucco's behalf. Parvanov was followed by the head of RWE, Jurgen Grossman, who said after meeting President Gurbanguly Berdymukhamedov on January 7, Turkmenistan had "huge potential" as a long-term energy partner. [For background see the Eurasia Insight archive].
Deirdre Tynan is a freelance journalist who specializes in Central Asian affairs.