From the world per cubic meter

The European Commission collects gas promises to fill Nabucco

Another delay in the commissioning of the Nabucco gas pipeline project forced the European Commission to intensify the negotiation process with all possible gas producers. On Wednesday evening, the head of the commission, Jose Manuel Barroso, and the European Commissioner for Energy, Andris Piebalgs, after negotiations with Iraqi Prime Minister Nouri al-Maliki and Energy Minister Hussein al-Shahristani, told the press that they were close to reaching agreements on the supply of Iraqi gas. Mr Barroso said details were being discussed and a memorandum of understanding would be signed in a few weeks. Perhaps this will happen during Mr. al-Shahristani's next visit to Brussels, scheduled for early May. And Mr. Piebalgs clarified that we are talking about supplies at the first stage of 5 billion cubic meters of gas per year to Europe from the Akkaz gas field, located on the border with Syria.

The Nabucco project is going to be implemented by a consortium of the Austrian OMV (informal leader), the German RWE, the Hungarian MOL, the Romanian Transgaz, the Bulgarian Bulgargaz and the Turkish Botas. The pipeline from Turkey to Austria should deliver gas bypassing Russia from the Caspian region, as well as from the Middle East. The gas pipeline was planned to be put into operation in 2009, then in 2011, and some time ago the deadline was officially postponed to 2013. For the project to pay off, guarantees of supply of at least 25-30 billion cubic meters per year are required for 25-30 years.

Last week, after European officials met with Turkmen President Gurbanguly Berdimuhamedov in Ashgabat, emissaries solemnly announced that they had received a verbal promise to receive 10 billion cubic meters of Turkmen gas per year. However, there were and still are not sufficient gas guarantees to fill Nabucco. And Iran, whose gas reserves could solve all the problems with supplies through this pipeline, continues to remain under international sanctions initiated by the United States. Because of them, the development of the giant gas field on the shelf of the Persian Gulf “South Pars” is also stalled.

As London's The Financial Times reported yesterday, Iranian Oil Minister Gholam Hossein Nozari even presented an ultimatum to three European companies participating in the project - the Anglo-Dutch Royal Dutch Shell, the French Total and the Spanish Repsol YPF: or they close investment deals in 14-- 16th phase of field development by June, or Iran will cancel contracts with them. The formal justification for Europeans is the increased financial costs of the phases. But in reality they fear persecution in the United States, which has already announced that it will brutally deal with all structures investing in Iran. Tehran, in turn, threatens to transfer projects to other European (primarily Austrian, eager to get gas for Nabucco) and Asian companies.

It is clear that 5 billion cubic meters from Iraq, which is at war, and “oral” 10 billion cubic meters from Turkmenistan (which it is unclear where to get and how to supply) cannot solve the issue in principle. Even Azerbaijan, which is friendly to the project, has not yet made any specific commitments, since it is not able to provide long-term guarantees for significant volumes.

The memorandum between Brussels and Baghdad also provides for EU assistance in restoring Iraq's war-torn energy complex, which should provide certain opportunities for European companies in upcoming tenders for the development of hydrocarbon deposits in this country. Mr. al-Shahristani confirmed during the visit that the Iraqi government has selected 35 of the world's largest oil and gas companies, including Russia's Gazprom Neft and LUKOIL, to participate in upcoming tenders to develop a number of fields. The minister made it clear that tenders will be held in the very near future. He also said that in 2009 a new group of fields will be open to foreign capital. At the same time, there will be a new selection of companies that want to work in Iraq.

Alexey GRIVACHS