It is little wonder that the forces of empire have settled upon Romania as the ultimate testing ground for US Geostrategic plans. The anti-missile system, which will ultimately target Russia, is to be located there. Romania has met all IMF conditions, with the sell of part of its natural energy assets to Western bidders. Potential deals with Turkmenistan, to supply gas to the temporarily postponed Nabucco, remain up in the air, while South Stream plans completely bypass Romania....
If Russia has its way, then Poland, Romania and Ukraine will have been excised from its energy circulatory system, opening new inviolable pathways to service Europe, solving Russia's supply problems, as well as Europe's but not in the way the West envisioned. Will the West allow this definite Russian victory to stand, on the ghost of Nabucco? Keep in mind that Nabucco has so far, merely been postponed to wait for Azeri gas in 2017. Nothing is resolved yet....
Nabucco pipeline delayed again...
By Robert M Cutler
MONTREAL - A lack of supply contracts has led to another delay in the construction plans for the Nabucco pipeline, the European Union-sponsored project that is designed to take natural gas from the Caspian Sea basin through the South Caucasus and Turkey into southeastern Europe for onward transmission to the rest of the continent. While skeptics of the project are highlighting this development as another obstacle, it should have been expected.
It was thought that construction would begin in 2012 on the basis of supply contracts concluded late last year or, after postponement, in the first half of this year. A few months ago it was announced that these negotiations would continue into autumn or winter, so the announcement that construction will not begin until 2013 is not really a surprise.
The new announcement gives rise, however, to increased publicity
By Robert M Cutler
MONTREAL - A lack of supply contracts has led to another delay in the construction plans for the Nabucco pipeline, the European Union-sponsored project that is designed to take natural gas from the Caspian Sea basin through the South Caucasus and Turkey into southeastern Europe for onward transmission to the rest of the continent. While skeptics of the project are highlighting this development as another obstacle, it should have been expected.
It was thought that construction would begin in 2012 on the basis of supply contracts concluded late last year or, after postponement, in the first half of this year. A few months ago it was announced that these negotiations would continue into autumn or winter, so the announcement that construction will not begin until 2013 is not really a surprise.
The new announcement gives rise, however, to increased publicity
about the cost of the Nabucco project, which was estimated at 7.9 billion euros (US$11.4 billion) on the basis of a 2005 feasibility study. Current estimates that have leaked into the press range from 12 billion to 15 billion euros - or $21.6 billion, almost double the 2005 figure. Nabucco's managing director, Reinhard Mitschek, has called the higher figures "speculative".
Mitschek emphasizes that plans to source gas from Iraq and Turkmenistan as well as Azerbaijan in the first phase will not necessarily boost the construction price. A Nabucco consortium spokesman confirmed that numbers from 2005 are under review but that current press rumors are "not accurate". New authoritative figures will be released in the future, he said.
In September 2010, the Nabucco consortium signed a mandate letter with the European Bank for Reconstruction and Development, the European Investment Bank and the International Finance Corporation (an arm of the World Bank) to launch negotiations for securing 4 billion euros in financing, an amount that may now be increased.
As planned in the beginning, the participating companies intend to raise the remainder from the national governments whose citizens would benefit from the enhanced energy security provided by Nabucco, from private sources, and from all-European sources such as the European Investment Bank and various EU-related institutions.
The new figures will depend also upon the Nabucco consortium's negotiations with the State Oil Company of the Azerbaijani Republic (SOCAR) for 10 billion cubic meters per year (bcm/y) from the Phase Two development of the Shah Deniz offshore field. However, just last month SOCAR signed an agreement with the Greek national gas company DEPA for gas to flow directly from Azerbaijan to Greece, as the Turkish firm Botas prepares to transfer its own agreement with DEPA to SOCAR.
This would open the way for the British firm BP (one of the sources of press leaks about increased Nabucco costs) to evacuate 10 bcm/y of gas from Azerbaijan's Shah Deniz Two deposit by building another string of the South Caucasus Pipeline (running from Baku through Georgia into Turkey). BP has in mind to transit this gas to southern Italy through Turkey and the Trans-Adriatic Pipeline.
That development follows the European Union's coaxing to open the Southern Gas Corridor via a combination of the Interconnector Turkey-Greece-Italy and the Trans-Adriatic Pipeline. The Interconnector Turkey-Greece of the former already connects the Greek and Turkish gas networks, and it entered into service three years ago.
The latter would run from near Thessaloniki in northern Greece, across Albania and under the Adriatic Sea, reaching Italy near the heel of the country's geographic "boot" at Brindisi. The Norwegian firm StatoilHydro, which owns 25.5% of the consortium developing Shah Deniz has a strong interest in favor of the Trans-Adriatic Pipeline, of which it also owns 42.5%.
The Nabucco delay also creates problems for the White Stream project to build an gas pipeline under the Black Sea from the Georgian to the Romanian coast, unless Turkmenistan and Azerbaijan separately come to a quicker meeting of minds concerning trans-Caspian sourcing of gas for Europe. President Gurbanguly Berdimuhamedov in Ashgabat has one eye on the west and another on the south for decreasing his own country's dependence on Chinese gas imports.
Thus earlier this month, the four-way talks concluded among the energy ministers of the countries looking to participate in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. These negotiations follow upon a framework agreement signed at the head-of-state level in December 2010. Facilitated by the Asian Development Bank, which is helping to realize the project, the current round focused on fixing the price of Turkmenistan's gas to India.
According to the Indian newspaper Economic Times, Ashgabat has asked a price of $505-$525 per thousand cubic meters (tcm); New Delhi's offer did not exceed $460/tcm. The issue from the Indian point of view is that the Turkmenistani offer would make TAPI gas more expensive than the liquefied natural gas that India already imports. There is no reason for Indian to invest in building TAPI if the gas will not have a competitive price.
Even if the Nabucco project succeeds and Turkmenistan's gas eventually reaches Europe through it in significant quantities, the country still has enormous resources that it will wish to export. Indeed, it is planned in Ashgabat that the Nabucco and TAPI pipelines are fed by different gas fields.
Russia, once Turkmenistan's biggest customer to the point of controlling Ashgabat's sales abroad, now imports only about 10 bcm/y, and Iran imports even less than that. Consequently, Turkmenistan needs Nabucco or TAPI, or preferably both, because otherwise it would become as dependent upon China as it was dependent upon Russia up until just a few years ago, even with Nabucco in the mix.
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