Nabucco outlook bleak, analysts say

July 10, 2008 at 1:09 PM
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WASHINGTON, July 10 (UPI) -- The U.S.-backed Nabucco natural gas pipeline meant to ease European energy dependence on Russia is bordering on impracticality, officials say.

The 2,000-mile natural gas pipeline could be a means for Europe to ease its dependence on Russian natural resources. The United States and the European Union back the project as a strategic option for NATO allies.

"What we would like to do is to get as much gas flowing to Europe from as many directions as possible so that through competition, market forces determine the price of gas. That's exactly what (Russian energy giant) Gazprom does not want," said Matthew Bryza, deputy assistant secretary of state for European and Eurasian affairs.

The Nabucco Pipeline would transport natural gas from Turkey through Eastern Europe to transport hubs in Austria. The price of the project has soared over $4 billion to $12 billion, and supply and deadline concerns are hampering the project, The Washington Times said Thursday.

Several countries engaged in pipeline activity, such as Bulgaria and Azerbaijan, are diluting their interest across several options, putting the Nabucco Pipeline in jeopardy.

"Nabucco is losing momentum because Europeans are not united. We don't get (a) very strong signal from Brussels or any of the key European leaders, because no one wants to anger Russia," said Zeyno Baran of the Hudson Institute in Washington. If Nabucco fails, she says, "a huge opportunity for Europe to diversify its gas from Russia is going to be lost."

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