Turkish gas ambitions derail EU pipelines

By STEFAN NICOLA, UPI Europe Correspondent  |  April 12, 2011 at 1:53 PM
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BERLIN, April 12 (UPI) -- Turkey's ambition to become an energy hub has been one of the major hurdles for new Europe-bound natural gas pipelines, an energy expert said Tuesday.

"Turkey doesn't want to be just an energy transit country," German gas expert Roland Goetz Tuesday told the foreign press corps in Berlin. "Ankara wants to dictate pipeline plans, and it wants to make a profit itself."

This desire, Goetz added, has led to problems for two very different natural gas pipeline projects -- Nabucco and South Stream.

Backed by the European Commission, Nabucco would bring Central Asian and Middle Eastern gas to Europe in a bid to diversify Europe's energy import structure away from Russia. South Stream was jump-started by the Kremlin to bypass traditional transit countries Ukraine and Belarus and transport Russian gas unilaterally to Europe.

What unites the pipelines is that they both run through Turkish territory.

Russia has been trying to convince Turkey to have South Stream cross its territorial waters in the Black Sea. So far, Ankara has refused, saying it needed more documentation on economics, routes and environmental impact. Gazprom said it aims to make a decision on the route of the pipeline by the middle of 2011.

Nabucco has tried to secure gas deliveries from Turkey's neighbor Azerbaijan and from Turkmenistan. A clear commitment from either one of these nations is needed to realize Nabucco, experts say.

It would be in Turkey's interest that at least South Stream isn't realized, as it's going to be filled with Russian gas and there's little profit to be made for Turkey, Goetz said.

Not so with Nabucco: Turkey could easily boost its already existent domestic pipeline network, buy up Azeri and Turkmen gas, and sell that to a shorter Nabucco pipeline that begins at Turkey's Western border.

"Compared to an expensive pipeline that starts in Azerbaijan, this might even be a more economical solution," Goetz said.

Nabucco is to transport up to 31 billion cubic meters of Caspian and Middle Eastern gas per year to Europe. Its consortium includes Germany's RWE as well as companies from Austria, Hungary, Bulgaria and Turkey.

South Stream would have a capacity of 63 billion cubic meters and is planned to run under the Black Sea. The consortium is backed by Gazprom and Italy's Eni, which both own 50 percent in the consortium.

The pipeline recently received a major boost when Wintershall, the oil and gas arm of German chemicals giant BASF, said it would join the consortium, acquiring a 15 percent stake. France's EDF had announced last year that it would take 10 percent. The shares are expected to come from Eni's stake.

Critics have accused Russia of launching South Stream to torpedo Nabucco.

The South Stream consortium members deny this, arguing their pipeline makes economic sense.

Experts have in the past questioned whether there is room for both projects as they vie for similar sources and customers, with analysts speaking of a "pipeline war."

A possible demise of nuclear power in Japan and at least parts of Europe could boost the gas demand significantly and increase chances for both Nabucco and South Stream to co-exist, analysts have said.

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