Friday, June 28, 2013

Nabucco is no more

Pending Azerbaijan's official announcement on Friday, we can say that the Nabucco pipeline, intended to lessen certain EU member states' reliance on Russian gas, is no more.
EUObserver reports that Austrian firm OMV, part of the Nabucco consortium, said on Wednesday (26 June) that Azerbaijan, the gas supplier, has opted for the rival "Tap" pipeline instead.

"[Azerbaijan's] Shah Deniz II consortium informed OMV, as a shareholder of Nabucco Gas Pipeline International, about the decision on their preferred gas transportation route to Europe. The Nabucco West project was not selected by the consortium," it noted on its website.
While Tap is also intended to bring "10 billion cubic metres (bcm) of gas a year from the Caspian region to EU countries in the next five or so years to Europe" by-passing Russia, it is less useful.
Tap is to run from the Turkish border via Greece, Albania and the Adriatic Sea, to Italy. Nabucco West was to have run from Turkey via Bulgaria, Romania and Hungary, to Austria.

Greece depends on Russian gas for 58 percent of consumption, while Italy's dependence is just 22 percent.

Neither country was badly hit in the 2008/2009 Russia-Ukraine gas crisis.

But in Bulgaria, which depends on Russia 100 percent, street lights went out in Sofia and electricity supplies to hospitals were put at risk. Dependency is also high in Hungary (56%) and Austria (52%).
If these plans go ahead certain countries will remain vulnerable to Russian pressure and, not to put too fine a point on it, blackmail. On the other hand, of course, Russia badly needs to sell its gas as its income relies almost entirely on raw produce like gas and oil.

Then again, President Ilhan Aliyev of Azerbaijan is no slouch when it comes to using the country's gas reserves to extract various concessions from the EU (though he is less likely to start putting pressures on individual member states) and is said to be delaying signing the Tap agreement till the autumn, that is the next presidential elections.


  1. Some countries might eventually be persuaded to do the sensible thing and start fracking their own gas. We can but live in hope. Everyone who is looking for shale gas seems to find it. At one time the Caucus was full of oil feeds, which is why Hitler was so keen to get his hands on them. Suggests there might be deposits there.

  2. The news about shale gas in the UK is certainly very encouraging.