Thursday

20th Feb 2020

EU-backed Nabucco to receive legal certainty

  • Nabucco could supply up to 5-10% of the EU's gas demand, the European Commission says (Photo: eastpole)

The Nabucco project, designed to cut the dependence of energy-hungry Europe on Russian gas, will reach an important milestone later today (13 July) as EU governments and Turkey are set to sign a key transit pact.

"The signature will show that we are determined to make the Nabucco pipeline a reality as quickly as possible," European Commission chief Jose Manuel Barroso said ahead of the signing ceremony, which would effectively end six months of intense negotiations on the use of the pipeline.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

The 3,300-kilometer pipeline is expected to run between the Caspian Sea region and Austria, crossing Turkey, Bulgaria, Romania and Hungary.

Ankara, for its part, wanted to take 15 percent of the gas flowing through Nabucco at a discounted price for internal consumption or even for re-exportation, but was not granted this.

The Nabucco's entire capacity amounts to 31 billion cubic metres of natural gas per year.

"The [EU-Turkey] agreement is a very significant one," says Karel Hirman, an energy expert from the Slovak innovation and energy agency. "Turkey sought to become a gas dealer, while this agreement will make it a regular transit country profiting from transit fees."

Once the basic legal pact is sealed, companies keen to use the Nabucco pipeline can bid for its capacity by signing contracts with the Nabucco Gas Pipeline International, a consortium consisting of gas companies from the five countries concerned plus Germany's energy giant RWE.

"Things have to be done step by step," the European Commission energy spokesperson Ferran Taradellas Espuny said, explaining that "once the gas is contracted, then you start building the pipeline."

Brussels has put aside €200 million from EU coffers as a "little carrot" for companies to begin construction work as quickly as possible. The incentive is part of the bloc's €5 billion recovery package and so needs to be spent in 2009 and 2010 in order to boost the ailing European economy.

"The Nabucco International Company has to make a proposal of how it intends to spend the money before 15 July," the commission spokesperson said.

Construction is expected to begin in 2011, with the €7.9 billion project possibly up and running by 2015. However, its success hangs by a thin thread, being highly dependent on whether a sufficient number of countries commit themselves to put gas into the Nabucco pipe.

The EU's executive body has put its biggest hopes on Azerbaijan. The country, with proven natural gas reserves of some 850 billion cubic metres, is seen as Nabucco's first source of gas.

In addition, Turkmenistan's president Gurbanguly Berdymukhamedov on Friday (10 July) said that Ashgabat had "a surplus of natural gas available to foreign customers, including the Nabucco pipeline."

Iraq, Egypt and even Iran at a later stage are also seen as potential suppliers, with the commission's Ferran Taradellas Espuny arguing that "the European market, including price conditions, is extremely attractive for gas producers in the region."

But Karel Hirman, a Slovak-based energy expert, pointed to possible competitors such as Russia and China.

"China has intensified efforts to be present in Central Asia," Mr Hirman said, pointing to a pipeline between the Asian tiger and Turkmenistan that should be operational from next year.

The EU-backed Nabucco project gained fresh momentum after Russia at the beginning of the year turned off its gas taps, leaving Ukraine and a number of European customers stranded.

Bulgaria and Slovakia - entirely reliant on Russian supplies - were most affected, with Bratislava claiming the economic damage amounted to some 0.5 percent of the country's gross domestic product.

Net payer countries push back on EU budget plans

As EU budget negotiations enter a nasty phase, EU council chief Charles Michel tries to please two divided groups of member states, but Austria's Sebastian Kurz has warned net payers cannot be pushed for more.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Interview

EU Africa envoy: Europe needs to look beyond migration

Europe's obsession with migration from Africa means it risks losing out the continent's potential when it comes to trade, says the EU's ambassador to the African Union, Ranier Sabatucci. "Africa is a growing continent, it is the future," he says.

News in Brief

  1. EU unveils white paper on AI and data strategy
  2. Dutch court rules against Russia in €46bn Yukos case
  3. Britain to bar 'Polish plumber-type' migrants
  4. Greece seeks EU help to get back classical statues from UK
  5. HSBC to cut 35,000 jobs worldwide
  6. Regions chief appeals against cutting EU cohesion funds
  7. Verhofstadt criticises UK Brexit negotiator
  8. Turkish court acquits Gezi park activists

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. EU leaders face major clash on rule of law budget link
  2. North Macedonia warns EU on 'dirtiest ever' election
  3. Western 'endarkenment' and the voodoo politics of Europe
  4. Warning of agricultural 'digital arms race' in EU
  5. Cayman Islands put on tax-haven blacklist after Brexit
  6. Boris' Brexit bluff? - UK will resist alignment to the end
  7. US still open to Kosovo-Serbia land swap
  8. EU countries enter final phase of budget talks

Join EUobserver

Support quality EU news

Join us