It is reported that after years of political and financial preparation, planning for the Nabucco gas pipeline project aimed at bypassing Russia has entered the final phrase. By year end the design work will be completed. If everything is on track the gas can flow as soon as 2014.
According to the best case scenario with Iraqi and Azeri sources at the start Nabucco could precede rival project South Stream.
Mr Mihály Bayer Hungarian Nabucco Ambassador said “The Nabucco project is in the stage where financial decisions will be completed in the near future. The consortium that runs the Nabucco project expects to make a final financial decision in the first half of 2010. By the end of 2009 beginning of next year, the design work will be completed. We will have the exact route of the pipeline by this time.”
He said that in the meantime, further political steps are needed. First, the five countries that signed the Nabucco Intergovernmental Agreement in Ankara in July have to ratify the document. While it can happen as early as mid October in Hungary, the process takes longer in other countries, such as Romania, due to the different legislative systems. Participating European governments also have to sign bilateral project support agreements with consortium Nabucco International Gas Pipeline GmbH. There are plans to form an International Nabucco Committee with the participation of the recipient countries in order to keep the political support behind the project.
1. South Stream
Gazprom and Eni plan to build a new pipeline to take Russian gas under the Black Sea to Europe. Gazprom had previously discussed expanding the existing Blue Stream pipeline but that could now be in doubt.
2. Yamal-Europe
The pipeline, running from Russia Yamal Peninsula in the Arctic region to Frankfurt on the Polish German border, carries gas more than 4,000 kilometers. The expansion of the pipeline which is expected to be completed by 2010 should boost capacity to 67 BCM a year through two stretches.
3. Gasdotto Algeria Sardegna Italia:
The 1,350 kilometer Galsi gas pipeline could bring up to 10 BCM a year of Algerian gas to Italy through Sardinia when it opens in 2012. The developers include state run Algerian gas company Sonatrach and Italy Enel.
4. Trans-Mediterranean Pipeline
Sonatrach is also working to boost the capacity of the existing 27 BCM per year Transmed gas pipeline which runs from Algeria through Tunisia and into Sicily by 6.5 BCM per year.
5. Medgaz
The 210 kilometer, 8-BCM a year Medgaz pipeline is planned to bring Algerian gas to Spain. Work in laying the subsea stretch was finished in December 2008. The pipeline is expected to become operational in mid 2010. The Sonatrach led project involves Spain Compañía Española de Petróleos, Iberdrola, Endesa and France’s GDF Suez.
6. Nord Stream:
The EUR 7 billion gas pipeline would carry up to 55 BCM of gas 1,200 kilometers from Vyborg, Russia to Greifswald, Germany under the Baltic Sea. Nord Stream is majority-owned by Gazprom, which is building it with Germany’s BASF, E.ON and Netherlands-based N.V. Nederlandse Gasunie. There are plans to build two parallel gas-pipeline legs of 1,200 kilometers each.
Caspian Gas Pipeline: Russia, Turkmenistan, and Kazakhstan have agreed on plans for a gas pipeline around the Caspian Sea to deliver 10-20 BCM per year. Currently it is still undergoing a feasibility study.
MOL has said Hungary Gas Pipeline MOL plans to build a 100 kilometer expansion of its gas pipeline toward Ukraine by 2010. The pipeline would help meet Hungary’s rising domestic gas needs, but is not an alternative to other planned pipelines such as Nabucco or Blue Stream.
In order to complete the planned EUR 7.9 billion project the consortium needs around EUR 2.2 billion from investment banks besides the financial resources of participating oil and gas companies, Bayer stated. The European Investment Bank and the European Bank for Reconstruction and Development have already announced that they are ready to take part in the financing of the project, the International Finance Corporation of the World Bank and several export-import banks are also interested. The European Commission has allocated EUR 250 million for the project.
Gas resources are still an issue as well. Consortium managing director Mr Reinhard Mitschek announced October 1st that the Nabucco pipeline will use Iraq and Azerbaijan as its first main resources. The first deliveries of gas through the pipeline, due in 2014, would come from these two countries which would “allow it not to be dependent on a single source adding that the focus had shifted to Iraq from Azerbaijan to supply the first gas because discussions had progressed more there.
Mr Mitschek said the first full year of gas deliveries will be 2015 when the consortium expects some 8 billion cubic meters of gas to be pumped from Iraq’s Kurdish region. During 2015 to 2016 there should be a further 8 BCM from Azerbaijan. This would give a total of around 16 BCM by 2016.
Iraq could step forward as Nabucco’s primary source after Austria OMV and Hungary MOL Magyar Olaj és Gázipari Nyrt among the founders of the Nabucco consortium in May 2009 each took 10% stakes in Iraq’s Pearl Petroleum Company Ltd based in the Kurdish region.
Azerbaijan has also shown a strong commitment toward the Nabucco project. President Mr Ilham Aliyev confirmed January 29th 2009 that Azerbaijan was planning to at least double its gas production in the coming five years to supply the pipeline. At the end of September State Oil Company of Azerbaijan Republic announced that it aims to supply natural gas for Nabucco and partner up with Romanian oil and gas companies in hydrocarbon storage and transport projects. According to the Romanian press, Azerbaijan has agreed to provide Romania with 7.3 BCM of natural gas for the Nabucco pipeline.
Mr Bayer said in addition, neighboring Turkmenistan has expressed a never seen before interest to the project, Bayer told CBW. Nabucco also counts on Iranian natural gas as a potential source. Although in the current situation it is not a reality to exploit these resources.
Although the commitments of countries in the resource rich Caspian region are getting stronger, nobody expects Nabucco will be alone in demanding and delivering gas. Gas and oil rich countries in central Asia also have ongoing negotiations with neighboring Russia in the name of diversification of exports.
According to the plans, Nabucco supported by the European Union and the US has a slight chance of being completed in 2014 before its main rival, the Russia supported South Stream project.
(Sourced from www.cbw.cz)
