EU FACES CONTINUED DIFFICULTY IN SECURING CASPIAN GAS (3/2)     Print Email

By Aaron Brinckerhoff, European Affairs Editorial Assistant

Europe’s quest for gas from the Caspian Sea – by-passing the near monopoly supplier Russia -- continues to be dogged by failure to secure a single provider.  The planned Nabucco pipeline, which would run 4,000 kilometers, or nearly 2,500 miles, from eastern Turkey to Austria, has long been the EU’s chief hope of securing a reliable supply of natural gas from the Caspian region--Turkmenistan, Azerbaijan, and Iraq. (The name Nabucco comes from the Verdi opera seen by the founding developers of the project.) For years, EU leaders and member states, along with successive U.S. administrations, have regarded this pipeline as crucial for Europe’s long-term security

Implementation has faced continual financial and political hurdles. These include, for example, finding Caspian gas producers that could provide enough deliveries to fill Nabucco’s capacity. Advocates have argued that “if you build the pipe, suppliers will come.”  But that field-of-dreams logic has failed to convince many potential investors, especially as Russia has gradually made deeper inroads into the Turkmenistan export market, tying up gas for its own pipelines to sell to Europe. In 2007, the state-owned Russian oil giant Gazprom announced it was building the ambitious South Stream pipeline – which would provide direct competition with Nabucco - through the Black Sea and up to Austria.

nabuccopipeline

On top of that, construction estimates for Nabucco have soared from €7 billion in 2002 to €12-15 billion by the end of 2011. As a result, the consortium behind the pipeline has announced a new plan that would reduce its transport capacity by half, and later this year it will decide whether the project should be pursued or abandoned.

Competition to Nabucco has been fierce, as a proliferation of smaller projects are seeking to tap into the Caspian’s reserves. The primary alternative is TANAP, funded by Turkish and Azerbaijani energy companies. It would follow a similar route as the Nabucco project. Other alternatives include the Trans Adriatic Pipeline (TAP) stretching from Turkey to southern Italy and the Interconnector Turkey-Greece-Italy (ITGI) project.

With a smaller Nabucco pipeline, or no Nabucco pipeline at all, the principal southern energy corridor solution the EU has been working towards may well be for naught. But with other actors stepping up to serve Europe’s needs, the strategic dream of cutting dependence on Russian gas is still very much alive.

 

European Affairs

 
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