’No alternative to Nabucco’

A top Nabucco official has said the pipeline project is as much in need of Turkey as Turkey is in the Caspian natural gas project.

Nabucco Gas Pipeline International, or GmbH’s executive, Reinhard Mitschek, said yesterday the countries the pipeline ran through in the project Ğ that aims to bring gas from the Caspian to Europe through Turkey Ğ and the project itself were interdependent.

"There is only Plan A, which is NabuccoÉ Turkey needs Nabucco and Nabucco needs Turkey. If Turkey withdraws, the project will fail," Mitschek said. Europe consumes 500 billion cubic meters of gas a year but produces only 200 billion cubic meters a year, the rest it has to import. Natural gas imports will accelerate in the period from 2010 to 2020, a trend common for Europe and Turkey, according to Mitschek, who added they also wanted Iraq, Iran and Egypt to feed Nabucco.

One-stop-shop

The pipeline in Turkey may start from the Ahiboz region of Ankara and rent the existing pipelines of the Turkish Petroleum Pipeline Corporation, or BOTAŞ. Equally, it might start from eastern Anatolia, Mitschek said.

"We have not started discussions on this subject, but both alternatives are acceptable."

Mitschek said natural gas was destined for the Baumgarten gas station in Austria and it could be transferred in the other direction as well.

"We will act as a one-stop-shop, shipping and transportation costs will be met by a single actor," he said.

"Construction will begin in 2011, the year for making final investment decisions," the chief executive officer said.

BOTAŞ needs to invest in the 1,800 kilometer pipeline to pass through Turkey and each company will participate equally by contributing the same amount of money to the project, he said.

"Turkey is also a beneficiary of the project just like the other partners." BOTAŞ will benefit in terms of operating and pipeline maintenance, Mitschek added. Projected costs amount to 8 billion euros, 30 percent of which will be met from the capital stock of participating companies, he said. "This means 400 million euros from each of the six companies to construct the pipeline, provide capacity and market it." The Nabucco company is not structured for profit, Mitschek said.

The Blue Stream pipeline that carries natural gas from Russia to Turkey under the Black Sea is not a rival to the Nabucco pipeline Mitschek added. "Blue Stream can feed the Nabucco," he said.

Nabucco’s goal is to diversify Europe’s energy supply sources and routes, which are heavily dependent on Russian sources.

Mitschek said they would not exclude any countries from the project. "Any country that can supply gas could become a part of this project. But we have not received any requests at a shareholder level."

The South Stream, a rival pipeline project to carry gas from Russia to Italy through Bulgaria and Greece, and to Austria through Serbia and Hungary, has not yet undertaken feasibility studies, whereas Nabucco’s feasibility had been completed, Mitschek said.

"We are used to working together on one project and being rivals on another, in Europe’s free gas market. But this will not create any negative effects," he said.

"The European Commission is ready to provide support and has spared 250 million euros in grants for the project," Mitschel said. "The commission is backing the intergovernmental agreements that are expected to take final shape in April and May.

"We must take reserves in Azerbaijan and Turkmenistan into consideration. Gas companies in those countries, and Europe and Turkey have started negotiations. We will start with 8 to 10 billion cubic meters per year in 2014, which can increase to 30 billion cubic meters a year by 2019. Russia has ample reserves, but comparatively the richest zones in natural gas are in Central Asia and the Middle East," Mitschek said.