Nabucco Pipeline

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The Nabucco pipeline is a planned natural gas pipeline that will transport natural gas from Turkey to Austria, via Bulgaria, Romania, and Hungary. It will run from Erzurum in Turkey to Baumgarten an der March, a major natural gas hub in Austria. This pipeline is a diversion from the current methods of importing natural gas solely from Russia which exposes EC to dependance and insecurity of the Kremlin practices. The project is backed by the European Union and the United States.[1][2]

Contents

[edit] History

The preparations of this project started in February 2002 when first talks took place between OMV and BOTAŞ. In June 2002, five companies signed a protocol of intention to construct the Nabucco pipeline, followed by the Cooperation Agreement in October 2002. In December 2003, the European Commission awarded a grant in the amount of 50% of the estimated total eligible costs of the feasibility study including market analysis, technical, economic and financial studies. On 28 June 2005, the Joint Venture Agreement was signed by five Nabucco Partners. In February 2008, RWE became a shareholder of the consortium. On 11 June 2008, the first contract to supply gas from Azerbaijan through the Nabucco pipeline to Bulgaria was signed.[3]

[edit] Route

The pipeline will run from Erzurum in Turkey to Baumgarten an der March in Austria with total length of 3,300 kilometres (2,050 mi).[4] It will be connected near Erzurum with the Tabriz-Erzurum pipeline, and with the South Caucasus Pipeline, connecting Nabucco Pipeline with the planned Trans-Caspian Gas Pipeline.

Polish gas company PGNiG is studying the possibility of building a link to Poland with the Nabucco gas pipeline.[5]

[edit] Technical features

In early years after completion the deliveries are expected to be between 4.5 and 13 billion cubic meters (bcm) per annum, of which 2 to 8 bcm goes to Baumgarten. Later, approximately half of the capacity is expected to be delivered to Baumgarten and half of the natural gas is to serve the markets en-route. The transmission volume of around 2020 is expected to reach 31 bcm per annum, of which up to 16 bcm goes to Baumgarten. The diameter of the pipeline would be 56 inches (1,420 mm).[6]

[edit] Construction

The Nabucco project is included in the EU Trans-European Energy Network programme and a feasibility study for the Nabucco pipeline has been performed under an EU project grant.[7] The FEED services of the pipeline, including the overall management of the local FEED contractors, the review of the technical feasibility study, route confirmation, preparation of the design basis, hydraulic studies, overall SCADA and telecommunications, GIS and preparation of tender packages for the next phase, is managed by UK-based consultancy Penspen.[8]

Construction of pipeline is expected to begin in 2010 and is planned to be finished in 2013.[9] It estimated to cost around €7.9 billion.[10] The company leading the project is OMV from Austria.

[edit] Supply sources

The EU currently relies heavily on natural gas from Russia and is eager to diversify its suppliers. Nabucco pipeline may be supplied with gas from several middle east and central asian countries :

  • The main source of supply will be the second stage of the Shah Deniz gas field in Azerbaijan, coming on-stream in 2013. There is an agreement for 8 bcm of natural gas per annum with further expansion.[11]
  • Turkmenistan would provide for Nabucco 10 bcm of gas annually.[12]. Turkmenistan has large natural gas reserves e.g. the Dauletabad gas field. The natural gas could be transported through Iran or across the Caspian Sea via planned Trans-Caspian Gas Pipeline.
  • Iran has also proposed to supply gas to Nabucco pipeline, but this is rejected by the EU and the United States.[2][13][14]
  • In the long term Kazakhstan, from the Northerm Caspian reserves through planned Trans-Caspian Gas Pipeline.
  • Egypt, which has discovered large gas reserves in the Nile Delta basin during the recent years, could provide 3-5 bcm of natural gas through the Arab Gas Pipeline.[11]
  • Also Iraqi gas would be imported via the Arab Gas Pipeline from the Ekas field.[15]
  • There is also option, that Nabucco could be fed with Russian natural gas through the Blue Stream pipeline.[11]

[edit] Project company

The project is developed by the Nabucco Gas Pipeline International GmbH. The managing director of the company is Reinhardt Mitschek.[11] The shareholders of the company are:

All current shareholders have 16.67% of the shares.[16]

French company Gaz de France was also interested to get a stakes in the pipeline, but was rejected by Turkey.[17][18] In future the consortium intended to include also the State Oil Company of Azerbaijan Republic (SOCAR), however SOCAR has identified a number of problems with its membership.[19][20] Also Kazakhstan has indicated its readiness to join the project.[21] There are speculations that also Gazprom may be interested to participate in the project..[10]

The European Commission Nabucco coordinator is Jozias van Aartsen.[17]

[edit] Alternative projects

In 2006, Gazprom proposed an alternative project competing Nabucco Pipeline by constructing a second section of the Blue Stream pipeline beneath the Black Sea to Turkey, and extending this up through Bulgaria, Serbia and Croatia to western Hungary.[22] In 2007, the South Stream project through Bulgaria, Serbia and Hungary to Austria was proposed. It is seen as a rival to the Nabucco pipeline.[23] Ukraine proposed White Stream, connecting Georgia to Ukrainian gas transport network [24]

[edit] See also

[edit] References

  1. ^ "U.S. throws weight behind EU's Nabucco pipeline", Reuters, 2008-02-22. Retrieved on 2008-02-23. 
  2. ^ a b Stefan Nicola. "Analysis: Europe's pipeline war", United Press International, 2008-02-05. Retrieved on 2008-02-24. 
  3. ^ Judy Dempsey. "EU natural gas pipeline project gets first order", International Herald Tribune, 2008-06-11. Retrieved on 2008-06-13. 
  4. ^ "Nabucco gas pipeline is approved", BBC, 2006-06-27. Retrieved on 2007-11-10. 
  5. ^ "PGNiG Eyes Link To Nabucco", Downstream Today, 2008-04-14. Retrieved on 2008-04-19. 
  6. ^ "Nabucco gas pipeline project. Presentation" (PDF), Nabucco gas pipeline project company, February 2007. Retrieved on 2007-11-10. 
  7. ^ Energy TEN home page; Nabucco is on the priority axis NG3
  8. ^ "Penspen takes on Nabucco role", Upstream Online, 2008-01-07. Retrieved on 2008-04-20. 
  9. ^ "Nabucco Construction Pushed Back to 2010 - Exec", Downstream Today, 2008-02-22. Retrieved on 2008-02-23. 
  10. ^ a b "Nabucco Cost Estimate Rises 58%", Downstream Today, 2008-05-29. Retrieved on 2008-05-31. 
  11. ^ a b c d Neil Barnett. "Interview with Nabucco Managing Director Reinhardt Mitschek", Center for European Policy Analysis, 2008-03-14. Retrieved on 2008-04-20. 
  12. ^ "EU secures Turkmenistan gas deal", BBC, 2008-04-14. Retrieved on 2008-04-19. 
  13. ^ "Iran seen as alternative to Turkmenistan in Nabucco gas project", RIA Novosti, 2008-04-11. Retrieved on 2008-04-19. 
  14. ^ "US still opposes Iran as Nabucco gas supplier", Reuters, 2008-06-05. Retrieved on 2008-06-13. 
  15. ^ "EU, Iraq Seek To Seal Nabucco Deal Within Weeks - Barroso", Downstream Today, 2008-04-16. Retrieved on 2008-04-19. 
  16. ^ "RWE joins Nabucco consortium as sixth partner. Press release" (PDF), Nabucco Gas Pipeline International GmbH, 2008-02-06. Retrieved on 2008-02-19. 
  17. ^ a b "RWE keen on Nabucco supplies", Upstream Online, 2007-10-19. Retrieved on 2007-11-10. 
  18. ^ "GdF shrugs off Nabucco snub", Upstream Online, 2008-02-07. Retrieved on 2008-02-16. 
  19. ^ "OMV: Socar Could Be the Seventh Nabucco Partner", Downstream Today, 2007-10-05. Retrieved on 2007-10-13. 
  20. ^ "SOCAR not intending to be shareholder in Nabucco gas pipeline construction", Today.Az, 2008-06-12. Retrieved on 2008-06-13. 
  21. ^ "Kazakhstan to Join Nabucco Project", Trend Capital, 2007-10-22. Retrieved on 2007-11-10. 
  22. ^ Judy Dempsey. "Gazprom's grip on Western Europe tightens with pipelines to Hungary", International Herald Tribune, 2006-07-13. Retrieved on 2007-11-10. 
  23. ^ Neil MacDonald. "Balkan boost for Russian gas plan", BBC, 2008-02-25. Retrieved on 2008-02-26. 
  24. ^ Kostis Geropoulos. "Tymoshenko puts new White Stream pipeline on EU table", New Europe, 2008-02-05. Retrieved on 2008-06-01. 

[edit] External links