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Nabucco is dead. Long live…?30.01.2012 | 18:44
Most probably, Nabucco project will soon follow the king of Babylon after which it was named and sink into history. The fact that Azerbaijan has lost interest in the project is clear after the signature of TANAP construction memorandum (Trans-Anatolian gas pipeline). The event was followed by withdrawal of RWE (Germany), a key concessionary, from Nabucco. Presently Ukraine is expecting gas from Azerbaijan too. Yet, the remaining participants are still trying to resist.
Too many political resources have been invested in Nabucco to forego the project so easily. The European Commission will be particularly affected by the failure having lobbied this pipeline as a counterweight of Russia's South Stream. Apparently, in order to have mercy on Jose Manuel Barroso and his subordinates, participants of the project preserve coolness at the traditional economic forum in Davos and promise to calculate the final cost of the "tube" immediately after Azerbaijan proves availability of resources to fill it with. This is a rather cunning move: it is clear that Azerbaijan will never do that.
After the memorandum on construction of Trans Anatolia Gas Pipeline (TANAP) with estimated capacity of 16-24 billion cubic meters of gas was signed with the government of Turkey in late December, there is nothing else left for Nabucco. The same is true for Italian-Greek interconnector ITGI project and TAP, a Trans-Adriatic gas pipeline. However, unlike Nabucco, one of those above can still be implemented since both ITGI and TAP are considered as TANAP's extensions. The Turkish-Azerbaijani tube is likely to bury another widely advertised initiative - AGRI.
The reason is simple: despite richness of Shah-Deniz deposit, there is not enough gas for everyone. Particularly now that Turkey plans to buy 6 bn cubic meters of gas. The deficit in gas could have been replenished by Turkmenian gas. Yet the government of Turkmenia did not wait for indecisive Europe and offered gas riches of the country to the East - to China and Iran. So, the consortium members are welcome to wait for proves from Azerbaijan till the Second Advent.
"An empty pipeline is not a good bargain. Considering increase in its assessed value, the pipeline is getting still less attractive to Shah-Deniz consortium members and there is no chance that new suppliers will join in" - Reuters quotes Massimo di Odoardo, a European analyst. Presently, construction of Nabucco is estimated at USD 12 bn versus USD 5-6 bn for TANAP. Experts also remark that the final cost of the project might exceed estimations threefold.
The withdrawal of RWE energy holding (Germany), as reported last week, marked the de-facto fiasco of Nabucco. Pragmatic Germans don't want to waste time on a still-born project and are now actively discussing involvement in TANAP.
"We highly appreciate potential of TANAP project in view of considerable decrease of our financial obligations. We must study this variant", - Stefan Judisch, head of RWE energy supply department, specifies.
Another nail in Nabucco's coffin was beaten by today's signature of an agreement on supplies of Azerbaijani liquefied gas to Ukraine between energy ministers of Ukraine and Azerbaijan Yuri Boyko and Natig Aliev at the economic forum in Davos. After the LNG-terminal (the economic and technical feasibility report of which will be ready soon) is built on the Black Sea coast, Ukraine will be able to host up to 10 bn cubic meters of liquefied gas with TANAP being the source of the hydrocarbon raw material.
Yet, the pipeline will not be able to satisfy European needs even at the peak of its capacity. That means chances that an alternative pipeline - South Stream - will be constructed are now really high. It is not incidental that Russian PM Vladimir Putin ordered to start construction of the pipeline at the end of this year though initially the start of the project was scheduled for 2013.