Energy Blast – July 14, 2009

Turkey and EU countries have signed a transit deal for Nabucco, but analysts are still wondering where the gas to fill the pipeline will come from.  In response to the many doubters, European Commission President Jose Manuel Barroso has said, ‘I believe this pipeline is inevitable, not impossible‘.  Turkey has announced its hopes that Russia and Qatar will export gas through Nabucco and, despite opposition from the US, argued that Iran should be involved.  According to the FT, Iraq has offered to supply enough gas to fill half the capacity of the proposed pipeline.  The $11 billion project may make a saving on construction as steel prices drop.  The Washington Post describes how Nabucco could potentially offset fears of ‘midwinter blackmail’ again on the part of Russia.  Economic Development Minister Elvira Nabiullina has said that the price of Urals crude looks set to average at $54 per barrel this year, up on the $41 underpinning the budget.  The government has approved a 16% reduction in Gazprom’s investment program in the face of falling demand.  Oil-thirsty China appears to be attempting to forge stronger ties with OPEC member Ecuador.