Turkey signs big Europe gas pipe deal

14th July 2009, Comments 0 comments

A landmark deal signed with Austria, Bulgaria, Hungary and Romania will reduce Europe’s reliance on Russian deliveries.

Ankara – Turkey signed a landmark deal with four EU countries on Monday to pipe gas from the Caspian region, reducing Europe's reliance on Russian deliveries and rivalling Moscow's own pipeline project.

The United States hailed the signing of the accord by the prime ministers of Austria, Bulgaria, Hungary, Romania and Turkey – a milestone in the Nabucco pipeline project much delayed by lack of commitment from gas-exporting nations.

The 3,300-kilometre (2,000-mile) conduit is supposed to become operational in 2014 at an estimated cost of EUR 7.9 billion, but there was still lingering uncertainty over who will supply the gas.

It is due to pump billions of cubic metres from the Caspian Sea to Austria via Turkey and the Balkans, bypassing Russia which has been accused of using gas as a weapon by cutting it off in disputes with its neighbours.

The project "is of crucial importance for the EU's and Turkey's energy security," European Commission chief Jose Manuel Barroso said at the signing ceremony.

A statement from US State Department spokesman Ian Kelly meanwhile hailed the deal as "a significant milestone in achieving our shared vision of opening a new energy corridor that will bring Caspian gas to Europe".

Germany's economy ministry said in a statement that the deal "reduces the vulnerability of European supplies" and "opens a new chapter in economic relations between the EU, Turkey and the countries of the Caspian region".

The deal drew criticism however from environmental group Greenpeace, which urged countries to invest instead in cheaper clean energy such as wind and sun power.

The pipeline would raise Europe's harmful CO2 gas emissions, said Jurrien Westerhof, energy expert for Greenpeace Austria, in a statement.

With Nabucco's estimated cost, one could install 4,000 wind turbines and produce 8,000 megawatts of wind power, more than the total amount needed by Austrian households, he added.

A quarter of all gas used in Europe comes from Russia, with several southern European countries depending almost exclusively on Russian supplies.

Nabucco competes directly with Russia's South Stream project, which will carry Russian gas through Bulgaria to Western Europe under the Black Sea.

But "Russia is expected not to hinder directly or indirectly the Nabucco project," said Bulgarian premier Sergey Stanishev, whose country was among the hardest hit by the cut-offs last winter.

Azerbaijan is seen as the primary potential provider of gas for Nabucco. The ex-Soviet country recently signed a deal to sell natural gas to Russian firm Gazprom, but Turkey has insisted this will not compromise Nabucco.

Turkmenistan, Iraq and Egypt are also possible suppliers, though the United States has cast doubt on the Iraqi proposal, citing domestic disputes over its natural resources.

Iran is another possible supplier, but the United States and the EU oppose its participation.

Two European banks have offered to finance the project, but analysts say securing the cost could be difficult due to the global economic slowdown and uncertainty over suppliers.

The project has been delayed also by Turkish demands to use 15 percent of Nabucco's gas for domestic use or even for re-export. EU officials have offered to let the pipeline operate both ways, giving Turkey access to European stockpiles in times of need.

Erdogan meanwhile said the pipeline would boost its struggling EU membership bid.

"Our country's natural gas infrastructure will be integrated with that of Europe and mutual solidarity will be possible in times of potential crisis," he said.

Barroso said the project "could open the door to a new era in relations between Turkey and the EU, and beyond".

AFP / Expatica

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