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Oil and Gas Pipeline Watch

By DANIEL GRAEBER, UPI Correspondent   |   Jan. 26, 2009 at 4:16 PM   |   Comments

Nabucco summit kicks off in Budapest

Leaders from the six partners in the proposed Nabucco gas pipeline kicked off a two-day meeting Monday in Budapest to discuss the project's potential.

Energy officials and world leaders from the top Nabucco partners -- Austria, Bulgaria, Germany, Hungary, Turkey and Romania -- will take part in the conference. Representatives from the United States, Europe, Iraq and Egypt, along with officials from potential Caspian and Central Asian suppliers, will attend as well.

"The main objective will be to discuss and decide on a road map to go ahead," the Iranian Fars News Agency quoted Reinhard Mitschek, managing director of the Nabucco gas pipeline consortium, as saying.

Bulgarian Prime Minister Sergei Stanishev said the repercussions of gas-pricing debates between Ukraine, which hosts 80 percent of the Russian natural gas bound for Europe, and energy monopoly Gazprom put greater significance on Nabucco, Radio Bulgaria reported.

Nabucco would travel some 2,051 miles through host nations Bulgaria, Hungary and Romania to bring gas from Caspian and Middle Eastern suppliers to Europe. The Western-backed project is heralded as a near-panacea for European energy diversity.


Economy dims prospects for Alaskan gas pipelines

Declines in demand in the natural gas market brought on by the global recession put plans for a gas pipeline from Alaska in jeopardy, analysts said.

Market analysts and officials from oil and gas majors met in Anchorage at an industrial conference to discuss the possibility of developing natural gas arteries from Alaska.

Brian Frank, the president of gas marketing at oil and gas major BP, said the frozen credit market and the world economic crisis put the American energy sector on its heels, the Anchorage Daily News reported.

"It's not a pretty story right now, in terms of North American gas markets," he said.

Attendees also heard analysts highlight challenges presented by gas discoveries in the rest of the United States along with a shift toward renewable energy resources.

The planned TransCanada and Denali pipelines would stretch some 1,700 miles from the Alaskan North Slope to customers in the lower 48. TransCanada in 2008 received a license from Alaska that included $500 million in start-up revenue to go ahead with the project.


Iran opposes Trans-Caspian pipeline on ecological concerns

Iran is opposed to the construction of a Trans-Caspian pipeline network because of the potential for ecological damage to littoral states, officials said.

Deputy Oil Minister Hossein Noqrekar Shirazi said Iran is opposed to the construction of the planned 434-mile gas artery across the Caspian seabed, the Iranian Mehr News Agency reported.

The estimated $5 billion Trans-Caspian gas pipeline would run from the Aktau port in Kazakhstan across the Caspian to Baku, Azerbaijan. Its estimated capacity approaches 1.1 trillion cubic feet of natural gas per year.

The MNA report said that, though the Caspian region is emerging as a viable energy source with geopolitical consequences, development there has the potential for great environmental damage to the area.

Noqrekar Shirazi noted Russian officials may be opposed to the project as well. Iran, meanwhile, held talks with officials from Azerbaijan, Kazakhstan and Russia for development of the proposed 963-mile Neka-Jask oil pipeline, he added.

Neka-Jask could ship around 1 million barrels per day from the Neka port on the northern Iranian coast of the Caspian Sea to the southern port of Jask at the Persian Gulf.


Economic climate no setback for South Stream

Gazprom expects plans for the South Stream natural gas pipeline to Italy to proceed despite the downturn in the global economy, corporate officials said.

Alexander Medvedev, the deputy chief executive of Russian gas monopoly Gazprom, told reporters plans to develop the proposed pipeline to Italy were on schedule, the Interfax news agency reported.

"We have no major reason to put back the deadline for the implementation of the project," he said.

South Stream would travel from suppliers in Central Asia and Russia to Italy through the Balkans. Planners anticipate a launch date of 2013 to bring an estimated 1.1 trillion cubic feet of natural gas to European customers.

Medvedev said Gazprom would dedicate 2009 to conducting feasibility studies for the pipeline route and make investment decisions once those studies are finalized.

He reminded reporters Gazprom moved ahead with its Blue Stream gas pipeline to Turkey in the midst of a financial crisis in 1998.

"Blue Stream was put into practice at the peak of the crisis of 1998," Medvedev said. "Nothing can make a good project be canceled or put off."

Meanwhile, Russian First Premier Viktor Zubkov noted that beyond South Stream, the Nord Stream gas pipeline to Germany and the Nabucco gas pipeline to Europe would help diversify the regional energy sector, ITAR-TASS reported.

The January row over gas arrears and pricing mechanisms for Russian gas through Ukraine, which left Europe struggling to find alternative gas resources, has put renewed focus on diversification.

"It is important for all three gas pipelines to have real raw material," Zubkov said. "It is necessary to build the South Stream, the North Stream and Nabucco."

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(e-mail: energy@upi.com)

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