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BARÇIN YİNANÇ >Nabucco project: The name is dead but the concept is alive

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As I was turning up the heat at the weekend when the cold went down below zero in Istanbul, I shivered about the natural gas bill that will come next month, since the one last month has dealt a serious blow to my budget. 

I wondered one more time whether my government was making the best deals with the suppliers in order to secure that I get heating for the best possible price. And I recalled one more time that it is very difficult to give an accurate answer to that question since energy remains one of the domains, unfortunately, not effectively scrutinized.

How can the energy policies be effectively scrutinized when some of the information is kept confidential not only from the public, but even from official eyes. Even the foreign ministry does not poses a copy of the latest energy deals signed with Azerbaijan in the last months of 2011 on purchasing Azerbaijani gas as well as the construction of a pipeline across Turkey that will carry that gas, the Trans Anatolian Pipeline Project, or TANAP.

With the agreement on TANAP many concluded that this was the end of the Nabucco project, the 3900 kilometer pipeline that will connect Caspian and Middle Eastern gas to European consumers via Turkey. 
Nabucco’s aim was to secure diversification of the supplier as well as the supply route, which meant decreasing dependence on Russia. 

The proponents of Nabucco felt betrayed by Turkey, which in turn blames the EU for acting very slowly in concluding purchase deals that would then have sped up Nabucco’s realization. “With the economic slowdown that will reflect in the use of natural gas, Europe put the brakes on,” said a Turkish foreign ministry official.

“Azerbaijan wanted to sell the gas that it will produce from Shah Deniz 2 gas fields. It did not want to sell it to Russia and did not have the time to wait for EU to decide,” an Energy Ministry official told me. 

The aim of Nabucco was to get non-Russian gas to Europe through a route not controlled by Russia; with the Azerbaijani deals, both of those aims are met, this official added. 

“TANAP is the abridged Nabucco,” said an energy expert. The word abridged is indeed the right term since while Nabucco was supposed to carry 31 bcm (billion cubic meters) annually, the amount that will be carried to Europe is limited to 6 bcm, since 10 of the 16 bcm in the agreement is earmarked for Turkey’s own use. 

“There has been huge excitement in Baku over the deals with Turkey,” said another energy expert, who was based in Azerbaijan until recently. These deals were seen as opening an alternative route to Europe for Azerbaijani gas, according to that expert. This expert also informed me that intense discussions were going on between Baku and Turkmenistan and these talks were kept low profile for fear of Russian reaction.

And this is what John Roberts, a London based energy analyst wrote recently: “By incorporating into their thinking the concept of a standalone pipeline across Turkey, one of the most important elements of Nabucco, and by adding the flexibility of a system designed to grow, the Shah Deniz partners may wind up developing a system that eventually looks remarkably like Nabucco.”

In short, it looks like Nabucco project is dead in name but the concept is alive.

January/31/2012

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