EU bid to wean itself off Russian gas: Nabucco pipeline

The project, which would deliver Caspian gas directly to Europe, has hit some bumps ahead of Friday's EU-Russia summit.

from the May 18, 2007 edition

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But despite Russian efforts to undermine the $6 billion Nabucco pipeline, which enters its engineering phase next month, the project has not been derailed, says the five-member consortium behind it.

"It is neither dead nor is it delayed. Our main activities are on schedule," says Reinhard Mitschek, Nabucco's managing director. "Due to the variety of potential gas sources, single events and done deals between other market players will not jeopardize the project."

Nabucco, which is overseen by a consortium of five European energy companies – one from each of the five countries the pipeline would cross – is scheduled to break ground in 2009 and involves several construction phases. The pipeline is expected to be on line by 2012, pumping gas in an initial phase between Turkey's borders with Georgia and Iran along a 2,050-mile route through Turkey, Bulgaria, Romania, and Hungary before ending in Austria, which would then distribute the gas across other European networks.

The pipeline would eventually pump gas from the Caspian region, including Iran, Iraq, and Russia – but would remain under European control, Mr. Mitschek says. At full operation, the pipeline is expected to supply Europe with 31 billion cubic meters of gas a year. Future plans call for the pipeline to be extended to Turkmenistan and Kazakhstan.

Even with Nabucco, EU would still be dependent on Russia

But few analysts say Nabucco would allow Europe to break free from Russia altogether. The fact is, says Fariborz Ghadar, director of the Center for Global Business Studies at Penn State University, Europe's demand for natural gas, which could very soon replace oil as the continent's dominant energy source, is increasing too quickly.

That increase in demand conflicts with a decrease in natural gas production in Europe. By 2030, Europe could need to import as much as 80 percent of its natural gas, Prof. Ghadar says.

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