BRUSSELS, May 7 (UPI) -- Despite the fact that the Russian-backed Nord Stream and South Stream natural gas pipelines are quickly advancing, an expert said the European Union should boost support for its flagship energy security project -- the Nabucco pipeline.
"No demand, no supply, no money" -- that's how an expert summed up the outlook for Nabucco to Katinka Barysch from the Center for European Reform, an influential London think tank.
The 2,000-mile pipeline is to move 31 billion cubic meters of natural gas per year from the Caspian Sea to Austria via Turkey, Bulgaria, Romania and Hungary.
Intended to reduce dependence on Russian gas by connecting Europe's energy markets to those in the Caspian and the Middle East, Nabucco is a direct competitor to South Stream, which was launched by the Kremlin to torpedo the European project.
While energy utilities have interests in participating in both pipelines -- and in fact, they are -- Europe should increase its support for Nabucco, Barysch argues.
"Nabucco would be good for the EU in various ways," Barysch wrote in a policy brief on the think tank's Web site. "It would make Central and East European countries a lot less dependent on Gazprom and increase the energy security of the EU as a whole. It could help reduce intra-EU divisions over Russia. It would underpin stronger ties between the EU and potential supplier countries such as Azerbaijan and Turkmenistan."
It could also help relations between Brussels and Ankara at a time when Turkey's accession process is stalled, she added.
"Many of the benefits that Nabucco would bring do not accrue to the companies that are trying to build it or the banks that lend the money for it," she wrote. "Therefore, the EU and its governments should back Nabucco more strongly, both politically and financially."
In planning for almost a decade, Brussels this year allocated some $270 million to finally jump start Nabucco. While EU Energy Commissioner Guenther Oettinger said a decision on the construction of the pipeline should be made this year, it's clear that the original completion date -- 2014 -- can't be realized.
There are additional problems: Financing hasn't been secured and the only country that has committed to supplying Nabucco is Azerbaijan.
Other potential suppliers, including Turkmenistan and Iraq, have formulated an interest in joining the project but their participation has been held up for various reasons.
Meanwhile, Moscow has lobbied hard for the Russian-Italian South Stream pipeline, which is intended to bring 63 billion cubic meters of gas per year from Russia under the Black Sea to Bulgaria, and then on to Western Europe. The $27 billion project is scheduled for completion in 2015.
Construction for another pipeline project has already started: The Nord Stream pipeline will link Russia and Germany under the Baltic Sea, eventually delivering up to 55 billion cubic meters of gas per year to Europe -- enough for around 25 million households.
That doesn't mean Europe will have too many pipelines in the future. Despite the current lack of demand for Nabucco and Europe's ambitious climate protection targets, experts still foresee an increase in European demand for gas in the future, Barysch concludes.
''If such forecasts turn out to be correct, the EU will need Nord Stream, South Stream and all the southern corridor pipelines to satisfy its additional demand,'' she wrote.
