Oil and Gas Pipeline Watch

Yamal-Europe pipeline is the easiest option for diversity

Expanding the Yamal-Europe gas pipeline could be the quickest way to diversify transit routes for Russian gas to Europe, the Belarusian premier said.

Prime Minister Sergey Sidorsky said on the sidelines of a weekend meeting to settle the gas dispute between Russia and Ukraine that expansions to Yamal-Europe were ready to proceed, the Interfax news agency reported.

Negotiators met during the weekend to settle disputes dragging into their third week as Europe struggles to find alternate gas supplies. Russia had worked toward pushing ahead with the Nord Stream gas pipeline to Germany and the South Stream gas pipeline to Italy, but Sidorsky said Yamal-Europe could move more quickly.

South Stream and Nord Stream "can be implemented only by 2012," he said. "Yamal-Europe-2 can be carried out in a year, 18 months at the most, with much smaller costs."

Yamal-Europe travels some 2,607 miles from natural gas fields in western Siberia to customers in Europe. It carries about 1.2 billion cubic feet of natural gas per year.

The Ukrainian-Russian gas dispute put renewed interest in several natural resource arteries in the region as Europe seeks to diversify its energy sector. Sidorsky said expanding Yamal-Europe was a viable option toward that aim.

"This is a very good project capable of significantly boosting Russian gas deliveries to European consumers," he said.

Energy demand makes Nabucco attractive

Beyond the current European gas crisis, energy demands and emerging suppliers make the planned Nabucco gas pipeline a viable project, planning officials said.

Reinhard Mitschek, managing director of the Nabucco Gas Pipeline International, told Radio Free Europe/Radio Liberty the rising energy demand made the proposed project very attractive.

"The prospects for the Nabucco gas pipeline are excellent," he said.

Mitschek said emerging energy suppliers in Central Asia and the Caspian region, notably Turkmenistan, are looking to expand their customer base just as Europe is looking to ease its dependency on Russian natural gas.

Observers note the government of Turkmenistan has not explicitly endorsed the Nabucco project, prompting some to raise concerns over adequate supplies for the pipeline. Mitschek, however, said Turkmenistan joining Nabucco as a supplier would be a mutually beneficial move.

"This raises the value of their reserves and serves to develop the economy of the countries in question," he said.

Meanwhile, the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank have all been in contact with Nabucco officials to secure financing for the project.

Construction on Nabucco is scheduled to commence in 2010 with the first shipments transiting through the pipeline by 2013. Initial capacity estimates put the volume at around 300 billion cubic feet per year. The route for the pipeline travels from the Caspian Sea to Turkey and on to Europe through Bulgaria, Romania and Hungary.

Budapest scheduled a summit for Nabucco supporters Jan. 26 and 27.

Accelerate South Stream, Gazprom says

The technical and economic aspects of the planned South Stream gas pipeline to Italy may need to be accelerated, a spokesman for Russian gas giant Gazprom said.

Gazprom spokesman Sergei Kupriyanov said the gas row with Ukraine prompted officials to consider moving aggressively on the project, Serbian news agency B92 reported.

"We are activating work on the South Stream," he said.

Serbia and Russia signed agreements in late 2008 for the terms of a deal for the Serbian leg of the South Stream project.

South Stream would deliver natural gas to Russia's European customers along a route from the Black Sea to Bulgaria and on to Italy and Austria. The planned route goes around Ukraine.

Officials expect deliveries to transit through South Stream as early as 2012, with initial capacity estimates at around 1.1 trillion cubic feet of gas per year.

Gazprom executives also held a working meeting with Italian energy firm Eni on expediting work on South Stream.

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(e-mail: energy@upi.com)