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Northern Iraqi gas for Nabucco?

KIRKUK, Iraq, July 22 (UPI) -- Whether the EU-backed Nabucco pipeline can be realized depends also on whether the Europeans can secure natural gas supplies from northern Iraq.

Nabucco, a proposed 2,500-mile pipeline stretching from Azerbaijan to Austria via Turkey, is aimed at breaking the Russian domination of gas import routes to Europe. Moscow's answer was the creation of South Stream, a competing pipeline launched by the Kremlin to torpedo the European project.

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Nabucco would be designed to carry 1.1 trillion cubic feet of natural gas per year to Europe but from where that gas will come remains unclear.

Azerbaijan recently signed a memorandum of understanding on natural gas with Turkey, technically opening the way for Azeri gas exports to Europe -- but there have been no firm commitments forthcoming. Neighboring Kazakhstan, which also owns significant reserves of gas, recently spoke hesitantly about Nabucco.

"Kazakhstan has never been against Nabucco, the issue is that in Europe there is a lot of talk about Nabucco ... but in practice little is being done," Kazakh President Nursultan Nazarbayev was quoted as saying this past weekend by Russia's state-run news agency RIA Novosti.

That leaves northern Iraq's Kurdish province as a potential supplier of Nabucco.

Kurdish Prime Minister Barham Salih told CNN's Marketplace Middle East during a London economic summit that his government was making moves to participate in Nabucco. "We want to be part of the system," he said.

As much as 520 billion cubic feet of natural gas per year could be made available for Nabucco, Kurdish officials have said.

Kurdish-governed northern Iraq is much more stable than the rest of the country, enabling investments and business deals to go through in an easier manner. But completing a deal with the Kurds won't be easy as Baghdad will be trying to prevent such a unilateral energy policy move.

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. Moreover, financing isn't secured, nor has any country signed a contract for supplying the European pipeline with gas.

Its competitor South Stream, intended to move 63 billion cubic meters of gas per year from Russia under the Black Sea to Bulgaria and then on to Western Europe, gets gas from Russia and is backed by Italian company Eni. The Russians are eager to complete the $27 billion project by 2015, in a bid to beat Nabucco and at the same time bypass transit countries Belarus and Ukraine.

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