The Tangled Webs of Europe
The fate of the Nabucco pipeline is under scrutiny this week, as delays on investment and uncertainty about gas sources are stalling its completion. The politics involved in sourcing the gas required are complex. The Economist says that the need to avoid Turkish transit fees, combined with competition with Russia for Azeri gas, make Turkmenistan the most viable option as a gas source. But things remain up in the air: the overriding theme at the moment is possibility, but with no real sight of the finishing line ahead:
Another problem is the source of gas. At first Nabucco needs 8 billion cubic metres (bcm) a year from Azerbaijan, but it wants a lot more to be fully viable. Turkmenistan is the best option: it has fallen out with Russia, thawed relations with Azerbaijan, and built a pipeline from its onshore gasfields to the Caspian coast. Gas could continue from there either by a pipeline across the Caspian (though Russia objects) or, more cumbersomely, by tanker.
This is Russia’s chance to get South Stream off the ground before Nabucco untangles is various webs: and it knows it. The Economist piece says that ‘Bulgaria is still furious about having its gas supplies cut off during the Russian-Ukrainian gas row in January 2009.‘ But evidently not furious enough, as it has agreed today to intensify work with Gazprom on the South Stream and get the gas flowing by 2015. The race is on.
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