Nabucco is still alive

Nearly two months ago, Turkey and the EU finally overcame two outstanding problems regarding the transit of Azerbaijan’s natural gas to Europe across Turkey: that is, the price to Ankara of the Nabucco pipeline and the legal framework for domestic Turkish regulation of the venture. That gas would come from the second stage of development of Azerbaijan’s large offshore Shah-Deniz deposit. Overcoming these problems set the stage for a signing ceremony in Ankara for the Nabucco project, to be held

on June 25. That date has come and gone, without the ceremony and without the signatures.

An agreement was, however, signed this week between Baku and Moscow for the sale of offshore Azerbaijani gas to Russia’s Gazprom. Appearances to the contrary, this was not a dagger at the heart of Nabucco.
Some concern in Europe should be raised over remarks by Gazprom’s chief Alexei Miller to the effect that Gazprom has been assured priority in the purchase of gas from Shah Deniz Two. This is the deposit’s next development stage, on which Europe is counting to fill the Nabucco pipeline. Shah Deniz Two is projected to come on line in 2014, the year that Nabucco will begin pumping if construction begins as now planned in 2011, with annual volume of between 10 bcm and 15 bcm. Azerbaijan is unlikely, however, to commit so much to Russia that it cannot transit important supplies to Europe. This “assured priority” seems to be something less than “first refusal”.

Asia Times