ISTANBUL - The Nabucco pipeline project has been boosted thanks to a new deal struck between the European Union and Turkey, reports the British daily Guardian. According to one EU official, the deal is a breakthrough because the Turkish government has accepted all the terms. The agreement is expected to be signed in Ankara on June 25
The Turkish government has been driving a hard bargain, insisting on collecting a "tax" on the gas being pumped and demanding 15 percent of the transit gas at discounted prices. These requests have been rejected by the European Commission, the executive branch of the 27-nation bloc, delaying the 9 billion-euro project. More than half of the pipeline is to be located in Turkey.
The stalemate was broken at a summit in Prague last Friday between the EU and the countries involved. "The 15 percent demand has gone," Andris Piebalgs, the EU commissioner for energy, told the Guardian. "We've agreed on cost-based transit. We're very close to a conclusion." A senior Czech official organizing the summit likened the negotiations to "bargaining in an Istanbul souk," while an EU envoy to the region worried that "nothing is done until it's done."
But the European Commission president, Jos Manuel Barroso, said President Abdullah Gül assured him the deal would be signed within weeks. Both Barroso and Gül attended the summit in Prague.
The consortium that is planning to build and manage a pipeline stretching more than 2,050 miles from Turkey's eastern border through the Balkans to Baumgarten is headed by OMV, the Austrian oil and gas firm, with four national energy corporations Ğ Botas of Turkey, Bulgargaz of Bulgaria, Transgaz of Romania, and MOL of Hungary, plus RWE, the German energy group that joined the consortium last year even though its government prefers collaboration with Gazprom and opposes Nabucco. All six are grouped in Nabucco Gas Pipeline International.
As well as Nabucco, the Europeans spoke specifically for the first time about supporting the building of a pipeline under the Caspian Sea connecting Turkmenistan and central Asia to Azerbaijan.
Gas expected to flow in 2014 from eastern Turkey to Austria
The Nabucco pipeline will run 3,300 kilometers from eastern Turkey through Bulgaria, Romania and Hungary, ending in Austria, and will transport 8 to 10 billion cubic meters of natural gas per year starting 2014. Nabucco will be filled step-by-step, most likely with gas from Azerbaijan at first, and later with gas supplies from Egypt, Turkmenistan and Iraq. Iran has huge gas reserves and Europe will have to cover an increasing need for gas imports in the future.
Supply and demand normally find the way to each other if a politically-sound basis can be provided, officials say. The gas is planned to flow in the year 2014, and construction will start in 2010 or 2011.
Nabucco construction will start at the eastern borders of Turkey with feeder lines from the Georgian border and the Iranian border crossing Turkey, Bulgaria, Romania and Hungary to Austria. The project’s cost is estimated at 7.9 billion euros.