August 19th, 2007 by Gerhard_Mangott
Gazprom has offered Austrian oil and gas company OMV access to its South Stream project. This is a further step in Gazprom’s aim to build an additional pipeline alternative to its core pipeline routes via Ukraine and Belarus; it is the southern equivalent to the North Stream pipeline linking Vyborg to Greifswald (Germany).
OMV’s response may be a crucial not so much regarding the eventual route of a new pipeline, construction costs and length, but in terms of gas supplier countries. Nabucco – put forward in 2002 and very much supported by the EU in the framework of its Transeuropean Energy Networks Initiative – is meant to transport Azerbajani gas via Turkey’s Erzurum hub to Austria with Bulgaria, Romania and Hungary as transit countries. Its throughpout capacity is projected at 30 bln.m3. Obviously Azerbajani gas is not sufficient to fill such a pipeline. Further gas is needed – with Turkmenistan and Iran, maybe also Qatar, as additional suppliers. Turkmenistan, however, will not be able to deliver any gas at least in a mid-term perspective, given its long-term supply contracts with both Russia and China. In addition, a sea-bed pipeline from Turkmenistan to Azerbajan faces serious legal problems, as there is still no consensus among the littoral states as how to divide the Caspian Sea among them. As regards Iran, there are concerns, particularly by the US, to have it as a partner in a crucial gas supply route for the EU; particularly given the clash between the western powers and Iran over its nuclear programme.
South Stream on the other hand, is currently designed only for a throughput of 10 bln.m3. This pipeline could be filled with Russian and Central Asian gas. South Stream starts with a sea-bed pipeline crossing the Black Sea to Bulgaria, where it is to split into a northern pipeline route to Hungary or Austria and a southern tier to Italy. South Stream – unlike a previously planned Blue Stream II pipeline – leaves out Turkey.
None of these three options is already off the table. The author considers a merger of the Blue Stream II and Nabucco projects as the most likely option, if free access of all suppliers to the pipeline is guaranteed. At the moment this would include, Russia, Kazakh and Turkmen gas via Russian pipelines and Azerbajani gaz currently delivered to Erzurum (Turkey). In a mid-term perspective this could also include Turkmen gaz via the Caspian Sea and Iranian gas. If a southern tier is meant to make economic sense and viability this would be the best option. If political motives were to prevail, however, Nabucco is to prefer. However, it does not make sense to build a pipeline which cannot be filled with gas.
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