Turkey, EU countries sign gas pipeline deal

ANKARA, Turkey — European countries on Monday sealed an important agreement aimed at diversifying the continent’s energy sources — but their pipeline project to bring natural gas from Central Asia and the Middle East to Europe can’t entirely break Russia’s dominance.

The Nabucco pipeline is still seeking gas supplies — in particular, from Azerbaijan — despite promising words by Iraq, Turkmenistan, Egypt and Syria. It may even need Russian supplies to fill its 31 billion cubic meters of capacity — although Moscow would be likely to be reluctant to ship gas through Nabucco as it competes with rival Russian pipeline projects running to Europe.

The European Union and the United States — key backers of Nabucco — say they are confident that gas supplies will now be found after Monday’s agreement signed by Turkey and four EU countries — Austria, Bulgaria, Romania and Hungary — to allow the pipeline to cross their countries.

The 2,050-mile (3,300 kilometer) projected pipeline would run from the Caspian Sea across Turkey to Austria and involves investments of €8 billion ($10.26 billion), according to EU data. Still, Nabucco’s impact can’t end Europe’s need for large amounts of Russian gas, as it can carry no more than 5 percent of Europe’s consumption.

Moscow, meanwhile, is pushing hard for alternative pipelines to Europe for its own gas — the so-called “Nord Stream” through the Baltic Sea to Germany and the “South Stream” through Bulgaria.

And there are serious political and structural obstacles ahead for Nabucco.

Russia just two weeks ago clinched a new major natural gas deal with Azerbaijan to buy 500 million cubic meters of gas annually, gas that could have supplied the European effort. Azerbaijan’s Energy Minister Natiq Aliev on Monday refrained from any clear commitment to Nabucco. The deal with Russia is small but reveals the influence of Moscow over former Soviet republics.

“We support all directions concerning gas pipelines,” he said. “A certain amount of flexibility is required. It’s the profitability regarding trade that is important.”

Turkmenistan’s President Gurbanguli Berdymukhamedov on Friday signaled a desire to break Russia’s lock on most of the nation’s gas exports since the Soviet collapse in 1991, saying the desert nation has “colossal natural gas reserves,” and could support Nabucco.

But to feed Nabucco, Turkmen gas would have to be brought across the Caspian Sea to its western shore in Azerbaijan and there is no existing pipeline. In addition, Turkmenistan and Azerbaijan are at odds over Caspian Sea rights.

Iraq’s Prime Minister Nouri Al-Maliki on Monday surprised many by saying “Iraq can provide around 15 billion cubic meters for EU countries via Turkish territory.”

Two Nabucco partners are exploring northern Iraq gas fields adjacent to Turkey but the regional Kurdish authority has to work out export details with the central government in Baghdad. Iraq also would need the construction of new pipelines through Syria and Turkey to join Nabucco.

Qatar could export liquefied natural gas to a projected facility in Turkey which can convert it and pump the gas to Europe through the Nabucco pipeline, Turkey’s Prime Minister Recep Tayyip Erdogan said.

In an obvious reference to Nabucco, Prime Minister Vladimir Putin said in May that Russia has nothing against alternatives to its planned pipelines but added acidly: “Before putting millions of dollars into a pipeline and burying it in the ground, you have to know where the gas for this pipeline is going to come from.”

Alexey Gromov, deputy director of Russia’s State Institute of Energy Strategy, said Nabucco pits backers of Nabucco against Russia in a “political struggle.”

Russia provides over a quarter of Europe’s gas, and 80 percent of that moves over Ukrainian pipelines. By diversifying imports and redirecting some of the Russian shipments through Nabucco, Europe could prevent a repeat of the January crisis in which all deliveries through Ukraine were suddenly cut off because of a price dispute.

The United States and Turkey do not object to Russia’s participation in Nabucco as a business partner but Washington says Iran should be excluded until it improves its ties with the West.

The Nabucco would not only make Turkey an alternative energy route between Central Asia and the Middle East to Europe but could potentially enhance Turkey’s hand in overcoming EU resistance to letting it join the union.

“I believe that with the arrival of the first gas — and some experts have said this will be as early as 2014 — this agreement will open to door to a new era between the EU and Turkey,” EU President Jose Manuel Barroso said. “Gas pipes may be made of steel, but Nabucco can cement the links between our people.”

(sh-sf)