Caspian natural gas producers affirm supplies for Nabucco

The leaders of Azerbaijan and Turkmenistan, both major producers of natural gas in the Caspian region, have given assurances that their respective countries stand ready to serve as suppliers to the Nabucco gas pipeline, which is being backed by the US and the European Union.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, July 10 -- The leaders of Azerbaijan and Turkmenistan, both major producers of natural gas in the Caspian region, have given assurances that their respective countries stand ready to serve as suppliers to the Nabucco gas pipeline, which is being backed by the US and the European Union.

Azerbaijan’s gas reserves are sufficient to supply more than one pipeline project, according to Rovnag Abdullayev, the head of State Oil Co. of the Azerbaijan Republic (SOCAR).

"Azerbaijan's gas reserves are very rich. We can supply gas to each project separately," Abdullayev said after talks with Turkey's Energy Minister Taner Yildiz in Istanbul.

"Politically, we have decided to give support to Nabucco and we have given importance to Nabucco,” said Abdullayev. His remarks raised the possibility that Azerbaijan could supply gas to the line, which will extend 3,300 km from the Caspian Sea to Austria.

The $11 billion Nabucco pipeline will be built by a consortium led by Austria’s OMV and comprised of Hungary's MOL, Romania's Transgaz, Bulgaria's Bulgargaz, Turkey's Botas, and Germany's RWE.

The Vienna-based project, which is due to come on stream by 2014, will bypass Russia, which currently supplies Europe with a quarter of its gas needs. But Europe, mindful that Russia has often halted supplies of gas to neighboring countries, seeks to diversify its suppliers as a matter of energy security.

However, while the pipeline’s backers want to send as much as 31 billion cu m/year of gas to Europe, meeting 5% of its gas needs, a lack of supply agreements has so far hampered the line’s development.

Azerbaijan has so far made no commitment to supplying the Nabucco line, but Abdullayev’s remarks will doubtlessly help to ease concerns in Europe after Azerbaijan last month struck an agreement to supply Russia with gas (OGJ Online, June 30, 2009).

The concerns in Europe also will be eased by remarks of Turkmenistan’s President Gurbanguly Berdymukhamedov who said his country also is prepared to supply gas to the Nabucco pipeline project.

"Turkmenistan, consistent with the principles of diversifying its energy transport network on world markets, is considering all existing possibilities to participate in major international projects, as for example the Nabucco project," Berdymukhamedov said.

The upbeat statements by the two Caspian leaders came just ahead of the July 13 meeting in Ankara where the prime ministers of Turkey, Austria, Bulgaria, Romania, and Hungary are scheduled to sign an intergovernmental deal to allow the pipeline to pass their territory.

Although the US is not a party to the Nabucco treaty, it has been a strong advocate for the pipeline, saying it would diversify Europe's energy supply, benefiting the energy security of Washington’s NATO allies and easing the strategic energy threats to all hydrocarbon consuming nations.

"Strong US support for Nabucco is in our strategic and economic interest,” said US Sen. Dick Lugar, who is due to represent Washington at the Ankara signing.

“The Nabucco pipeline will help safeguard the independence and prosperity of each nation involved, and ultimately the transatlantic alliance,” said Lugar who added that: “Importing and exporting nations benefit when no single country monopolizes supply routes.”

Contact Eric Watkins at hippalus@yahoo.com.

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