EU may finance Nabucco gas link

Bloomberg

"I will propose tomorrow that some money to be used for southern corridors, particularly for Nabucco," EU Energy Commissioner Andris Piebalgs said yesterday in an interview on the sidelines of the Nabucco summit in Budapest.

"I need to get agreement from the parliament and the council," he added.

Hungarian Prime Minister Ferenc Gyurcsany earlier urged the EU to provide at least 200 million euros in initial financing, a figure that is "close to" the bloc’s likely contribution, Piebalgs said. European governments must agree on loans and capital for Nabucco by June 30, Gyurcsany said.

The summit brought together Nabucco consortium members Austria, Bulgaria, Germany, Hungary, Romania and Turkey with EU and Central Asian officials. Czech Prime Minister Mirek Topolanek, U.S. Deputy Assistant Secretary of State for European and Eurasian Affairs Matthew Byrza, government representatives from Azerbaijan, Egypt, Georgia and Iraq and corporate officials from Turkmenistan attended the meeting. Turkey was represented by Energy Minister Hilmi Güler.

Governments in the region are facing renewed calls to vary energy routes and diversify supplies after a gas-pricing dispute between Russia and Ukraine blocked shipments to the 27-nation bloc for two weeks this month. The Nabucco link would bring Caspian gas via Turkey through southeastern Europe starting from 2013.

"We must seriously begin to act" after a "deplorable lack of progress," Czech Prime Minister Mirek Topolanek, whose country holds the EU’s rotating presidency, told the conference. "Nabucco is of paramount importance for the freedom of the continent."

Nabucco is a 3,300-kilometer pipeline between Turkey and Austria aimed at transporting up to 31 billion cubic meters of gas each year from the Caspian Sea to western Europe, bypassing Russia and Ukraine.

Nabucco should be the preferred choice for Europe because it would reduce the continent’s "high dependence" on Russia, Topolanek said. The region gets a quarter of its gas from Russia. "However, it is not an anti-Russian project," Topolanek added. "We do not hold it against somebody, we want it for us."

Piebalgs said pursuing the project did not rule out the realization of the South Stream venture as well as other new pipelines, Europe must boost gas-storage capacity and improve its own pipeline connections to increase energy security, he added.

Azerbaijan, a potential supplier of gas to the pipe, is seeking greater "integration" with the EU and is committed to a policy of gas diversification, President Ilham Aliyev said in Budapest. Officials from Turkmenistan, Egypt and Georgia also said they supported Nabucco. The Caspian Sea nation, which has 2 trillion cubic meters of proven gas reserves and expects to produce 27 billion cubic meters of the fuel this year, will only decide whether to commit gas resources to Nabucco once questions over financing, transit fees and the construction timetable have been resolved, Aliyev told Bloomberg before the meeting.