ECONOMY

Commission and EU ministers give Nabucco the green light

VIENNA (Reuters) – Energy ministers and the European Commission put their political and financial might behind the 4.6-billion-euro Nabucco pipeline to pump Central Asian gas via Turkey to Austria at a meeting in Vienna on Monday. The European Union energy chief and ministers of countries crossed by Nabucco, a key plank in plans to diversify EU supply away from Russia, said they supported exemptions from EU antitrust rules to convince investors to fund the pipeline. «Over the past year we have seen the issue of security of energy supply become the issue of international relations,» said EU Energy Commissioner Andris Piebalgs. «The issue of energy security is on the table of every energy minister, as well as foreign, finance and industry ministers in Europe.» The EU’s European Investment Bank said at the meeting it was ready to finance 20 to 30 percent of the pipeline, and that the European Bank for Reconstruction and Development and the International Finance Corporation would help fund it as well. Ahead of a G8 summit next month pitting the EU and Russia against each other on energy policy, Piebalgs said Nabucco would remain the EU’s priority despite Russian plans to extend a rival gas pipeline. The operator of the 3,300-kilometer pipeline now expects the go-ahead for the pipeline next year, its head said. Nabucco will supply gas to Europe directly from the Caspian region, notably Azerbaijan, bypassing Russia. If building starts in 2008, it could begin operating in 2011. It could transport 25.5 to 31 billion cubic meters per year by 2020. Russian state-owned gas monopoly Gazprom has stepped up opposition to Nabucco, trying to woo Nabucco investors and customers to sign up for an extension of Gazprom’s Blue Stream pipeline under the Black Sea to Turkey. Gazprom and MOL agreed yesterday to form a company to study the proposed extension of Blue Stream in a deal that some analysts believe could kill Nabucco entirely. But Piebalgs said there was enough demand for both pipelines and cautioned that the Gazprom project was in an earlier stage than Nabucco. «The EU will need an additional 200 to 300 billion cubic meters per year in 25 years, so we have enough demand for at least seven Nabuccos,» he said.