Nabucco group pulls pipeline link to Iran

24/08/2010

A decision by shareholders in the Nabucco gas pipeline project effectively shelves plans for a link to Iran.

(Reuters, Wall Street Journal, Bloomberg, UPI, EurActiv, World Bulletin, Turkish Press, Sofia News Agency, Xinhua, Official Nabucco Consortium Web Site - 23/08/10)

photo

The planned pipeline will carry natural gas from Turkey to Western Europe through Bulgaria, Romania, Hungary and Austria. [File]

The Nabucco natural gas pipeline project will now include two supply lines at Turkey's borders with Georgia and Iraq, and will no longer link to Iran, the consortium for the multibillion venture announced on Monday (August 23rd).

"Two feeder lines were confirmed and the respective engineering works were ordered but due to the current political situation, Nabucco Gas Pipeline International is not planning a third one to the Turkish-Iranian border so far," the Vienna-based group said in a statement.

Preparations for the pipeline, designed to transport natural gas from the Caspian region and the Middle East to Europe, started in 2002. After long delays, the project took a major step forward in July of last year, when the five participating states -- Austria, Bulgaria, Hungary, Romania and Turkey -- signed an intergovernmental agreement in Ankara.

The consortium to build and run the Nabucco pipeline includes six companies -- Austria's OMV, Bulgaria's Bulgargaz, Hungary's MOL, Romania's Transgaz, Turkey's Botas and Germany's RWE, with each holding an equal share of 16.67%. Investment in the EU-backed project, aimed at reducing Europe's dependence on Russian gas, totals 7.9 billion euros.

Construction of the "new gas bridge from Asia to Europe", as the group describes it, is scheduled to begin in late 2011. The first gas is expected to flow by the end of 2014. The 3,300km pipeline, which will run from eastern Turkey to the Baumgarten gas hub in Austria via Bulgaria, Romania and Hungary, will carry 31 billion cubic metres of gas annually. However, the maximum capacity is not expected until 2018.

Finding reliable suppliers has been one of the biggest obstacles.

"The planned route offers a wide range of supply sources for the Nabucco gas pipeline, which will receive gas from Azerbaijan, Turkmenistan and Iraq," Monday's statement noted.

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The decision to shelve plans for a third feeder line to Turkey's border with Iran was taken at the latest meeting of the Nabucco shareholders' Steering Committee.

"Nabucco is not planning an Iranian feeder line anymore … in full accordance with international laws and regulations," the Wall Street Journal quoted consortium spokesman Christian Dolezal as saying in a written statement. "We cannot comment on possible future developments."

The announcement came more than two months after the UN imposed a fourth round of sanctions against Iran over its uranium enrichment activities. While Tehran insists that its nuclear programme is for domestic energy production purposes only, Western nations suspect that it is intended at developing atomic weapons.

In the wake of the June UN sanctions, the United States and the EU imposed additional restrictions on business activities with Iran in a bid to force it to halt its nuclear programme.

This content was commissioned for SETimes.com.
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