Saturday, July 17, 2010

EU Commissioner: Russia tries to call Nabucco into question to be gas monopolist in Europe

17.07.2010 EU  Commissioner: Russia tries to call Nabucco into question to be gas  monopolist in Europe

Azerbaijan, Baku, July 17 / Trend A. Badalova /

Russia is trying to put “Nabucco” gas pipeline project under question to be the only producer and seller of gas in Europe having no competitors, EU Commissioner for Energy said.

Russia is trying to call Nabucco into question to become the sole producer and wholesaler of gas, with no competition.

“I can understand their view, it’s fair enough. Russian interests are the same as ours in several areas, in others they differ, in the case of Nabucco our interests differ,” EU Energy Commissioner Gunther Oettinger said in an interview with Deutschlandradio.

A text of the interview was received by Trend from RWE company by e-mail. RWE is a shareholder in the Nabucco project with 16.67 percent stake.
Oettinger said that Russia is a key partner for the EU in the energy field.

About a quarter of the gas we consume in Europe comes from Russia.

The Russians also have an interest in making sure that gas is flowing because the pipelines they own – and Gazprom owns over 50 percent of the North Stream pipeline – are financed by them and the financing system will only function if gas is flowing.

“And the Russians need foreign currency to buy German and European machinery to drive forward their industrial development. We have a good business relationship,” Oettinger said.

That’s why we want to have a strong partnership with mutual commitment with the Russians, but also to have other partnerships to ensure our independence, he said.

In the gas crisis with Ukraine over a year ago and now again with the Belarus/Russia conflict, we have seen that there are political differences of opinion in Eastern Europe and gas is being used as an instrument of pressure. We cannot allow this to happen in Europe, Oettinger said.

“The general rule is – and this goes for food, oil and any other product – never to be 100 percent dependant on one supplier, but rather to have several suppliers. In the case of gas this is in our fundamental interest,” Oettinger said.

Europe needs another direct partner. Nabucco project in this plan corresponds more with its interests, he said.

According to the German energy group RWE, which is one of the shareholders of Nabucco gas pipeline, Europe’s dependence on gas import is 57 percent. The share of Russian import is 24 percent. The rest part of gas supplies falls to countries such as Algeria, Egypt, Libya, Qatar.
According to the International Energy Agency (IEA), demand for gas in Europe will increase from 526 billion cubic meters in 2010 to 622 billion cubic meters in 2030. Europe’s dependence on gas import is expected to increase from current 232 billion cubic meters to 476 billion cubic meters in 2030.

The European market requires large gas supplies as demand increases but own reserves run out. A need for more gas can be met by a large number of gas pipelines, he said.

The EU implements the concept “Southern Corridor” to diversify routes and sources of supply by increasing European countries’ energy security.
A project of Nabucco gas pipeline is a priority project within “South Corridor”. It aims to transport gas from the Caspian region and the Middle East to the EU countries.

The Nabucco gas pipeline project is worth 7.9 billion euro.

Construction is planned to launch in 2011, with first supplies being commissioned in 2014.

Azerbaijan, Baku, July 17 / TrendA.Badalova /

EU commissioner for Energy Gunther Oettinger named as “maneuver” the Russian Gazprom‘s proposal to the German RWE to take part in the Southern Stream project with design capacity of 63 billion cubic meters of gas per year.

“The offer is therefore a maneuver we should see as being part of the game, we should not see it as a possible change to the Nabucco fundamentals,” Oettinger said in an interview to Deutschlandradio radio station. Trend received the text of the interview by e-mail from the company RWE.

Earlier, it was reported that Gazprom discussed South Stream with RWE top management last week and RWE has shown an interest in joining the Russian project. Later RWE reported that it remains committed to the Nabucco pipeline project despite its intention to review Gazprom’s proposal to participate in the Russian South Stream project.

Regarding the potential withdrawal of RWE from the Nabucco project, Oettinger said “the separation is impossible”.

Investment decision on Nabucco designed to deliver gas from the Caspian region and the Middle East to EU is expected to be taken in late 2010. This decision will allow to begin the construction of the pipeline in 2011, so that the first gas on it went in 2014.

Oettinger assured that the European Commission will do its utmost to remove obstacles in the implementation of the project. Oettinger expects the investment decision on the project to be taken by late 2010.

“I expect that all involved companies will make a decision about whether and to what extent will invest in the pipeline during the year,” he said.

In April, the Nabucco consortium announced a pre-qualification tender for supply of durable goods (pipes, valves) for the construction of gas pipeline. Companies that will be responsible for the development of the national sections of the pipe have been established in transition countries, Turkey, Bulgaria, Romania, Hungary and Austria.

Oettinger said the European Commission as a matter of procedure discusses the details of future work with the entire transit countries of the Nabucco gas pipeline, whose maximal capacity will hit 31 billion cubic meters per year.

“I think that we will be able to reach a good decision by late 2010,” he added.

Nabucco gas pipeline project is worth €7.9 billion. Participants of the project are Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE companies. Each of participants has equal share to the amount of 16.67 percent. Nabucco Gas Pipeline International shareholders will invest 30 percent of total cost of the project, the rest 70 percent will be paid owing to loans.


The scandal over possible sale of Georgia’s gas-main pipeline to Russia is still on. Parliamentarians are disputing, banging parliament doors and fail to come to a unique position. The decision is almost here. The draft law on the pipeline withdrawal from the list of strategic facilities will be adopted in third reading in two days. What is in store for the longsuffering pipeline and how will major players act? This is what GeorgiaTimes correspondent discussed with Alexander Rusetsky, head of South Caucasus institute for regional security and Soso Tsintsadze, president of Georgian Diplomatic Academy, a politologist.

It’s been a long time since Georgia attracted so much attention. These 10-15 % of main-gas pipeline shares make different countries dance to the tambourine to pacify Georgia’s parliamentary minority. Even the government offers a friendly hand to the opposition assuring that the control stake won’t be sold away. As discussed behind the scenes it was Saakashvili himself who started this project to iron out difficulties in dialogue with Russia with the help of Gazprom’s intermediary. It seems selling these shares to the Russian group is everyone’s concern. According to our experts the pipeline was taken out of the list of non-privatizable facilities on purpose – since it is not operated at full capacity. Now the boom is guaranteed and a once ordinary facility will be made a hit.

Here is an incredible fact: it turns out that Russia and the USA have a common interest in the pipeline deal. Russia wants to accede into WTO. But until the embargo on imports of Georgian wines and mineral water is lifted and normal economic cooperation begins – things are in a bad way. The States, of course, are also interested in Russia’s accession into WTO but what Washington wants the least is Georgia’s closer ties with Turkey and Iran. Thus, Georgian authorities and US government, both having no warm feelings for the Russian Federation, choose the better of two evils. Georgians are afraid of money-offering Russians, but they are more afraid of being abandoned right at the door of Euro-Atlantic integration project.

Despite the crisis in Georgian-Russian relations, can the Georgian government or the opposition prefer Azerbaijan for the pipeline deal. It also, as we know, takes interest in the gas-main pipeline. May it be that selling a package to Azerbaijan, Georgia will strengthen its relations with Iran and Turkey and consequently stops being politically attractive to Europe and the States?

Alexander Rusetsky:


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