Long way to go for Nabucco after ink
Güncelleme Tarihi:
by Barçın Yinanç
Oluşturulma Tarihi: Temmuz 10, 2009 00:00
ISTANBUL - The expected signature ceremony on Monday for the Nabucco pipeline is a crucial step, but it is just the beginning for the multinational project. The Nabucco consortium will have to sign separate deals with transit countries and secure financing.
Signing the international agreement for the Nabucco pipeline project, which will carry Caspian gas to Europe via Turkey, represents an important turning point, but there is still important work ahead, according to experts.
The deal will be signed Monday in Ankara by heads of state from gas-producing countries as well as the transit countries through which the pipeline will pass. Following the ceremony, the Nabucco consortium will start working on signing host government deals with transit countries.
The 3,300-kilometer pipeline will connect the Caspian region, the Middle East and Egypt via Turkey, Bulgaria, Romania and Hungary with Austria. The consortium will also start looking for financing. The signing of the agreement will facilitate the search for financing, experts said.
The negotiations for the deal have lasted more than a year. The delay was due to disagreements on tax issues as well as Turkey’s concerns about its own energy needs. The Turkish government insisted on the option to buy 15 percent of the gas at a discounted rate for its own energy needs, a request rejected by the consortium. Turkey has dropped this request, but it might come up during negotiations for the host government agreement, a European official told the Hürriyet Daily News & Economic Review.
Energy security concerns
Meanwhile, Turkish energy security concerns were alleviated when Turkey was granted access to gas from Europe as well, said Turkish officials.
"The gas will not just flow from east to west. In times of crisis, we will be able to receive gas from Europe, which will mean the gas flow will also be from west to east," said a Turkish official who asked to remain anonymous. The accord on this principle is incorporated in the agreement, not only in the preamble of the document but in the main text as well, making it legally binding, said the official.
The Turkish side seems satisfied by agreements reached on tax issues. It was decided that 60 percent of tax revenues would belong to Turkey, as the longest part of the pipeline will cross Turkish soil.
Although Azerbaijani gas is expected to pass from the pipeline at the initial stages, the agreement leaves the door open to transport gas from Iraq and Iran. Because of the nuclear standoff between the West and Iran, there is no mention in the agreement of Iran or Iraq. The document just says there will be three entry points to the east of Turkey for gas.
Meanwhile, Ilham Aliyev, president of Azerbaijan, which is expected to be the main Nabucco supplier, will not attend the ceremony in Ankara as he is due to be in London for an official visit.
The deal will be signed Monday in Ankara by heads of state from gas-producing countries as well as the transit countries through which the pipeline will pass. Following the ceremony, the Nabucco consortium will start working on signing host government deals with transit countries.
The 3,300-kilometer pipeline will connect the Caspian region, the Middle East and Egypt via Turkey, Bulgaria, Romania and Hungary with Austria. The consortium will also start looking for financing. The signing of the agreement will facilitate the search for financing, experts said.
The negotiations for the deal have lasted more than a year. The delay was due to disagreements on tax issues as well as Turkey’s concerns about its own energy needs. The Turkish government insisted on the option to buy 15 percent of the gas at a discounted rate for its own energy needs, a request rejected by the consortium. Turkey has dropped this request, but it might come up during negotiations for the host government agreement, a European official told the Hürriyet Daily News & Economic Review.
Energy security concerns
Meanwhile, Turkish energy security concerns were alleviated when Turkey was granted access to gas from Europe as well, said Turkish officials.
"The gas will not just flow from east to west. In times of crisis, we will be able to receive gas from Europe, which will mean the gas flow will also be from west to east," said a Turkish official who asked to remain anonymous. The accord on this principle is incorporated in the agreement, not only in the preamble of the document but in the main text as well, making it legally binding, said the official.
The Turkish side seems satisfied by agreements reached on tax issues. It was decided that 60 percent of tax revenues would belong to Turkey, as the longest part of the pipeline will cross Turkish soil.
Although Azerbaijani gas is expected to pass from the pipeline at the initial stages, the agreement leaves the door open to transport gas from Iraq and Iran. Because of the nuclear standoff between the West and Iran, there is no mention in the agreement of Iran or Iraq. The document just says there will be three entry points to the east of Turkey for gas.
Meanwhile, Ilham Aliyev, president of Azerbaijan, which is expected to be the main Nabucco supplier, will not attend the ceremony in Ankara as he is due to be in London for an official visit.