Gazprom-Eni deal

ISTANBUL (Reuters) – A plan by Gazprom and Italian company Eni for a pipeline to take Russian gas to Western Europe threatens the Nabucco scheme that would link Caspian fields to Europe via Turkey, a Turkish energy official said. But Greek Prime Minister Costas Karamanlis told reporters after meeting with Russian President Vladimir Putin at a meeting of Black Sea countries in Istanbul that the South Stream pipeline would complement, not replace, other projects. The decision to build the link under the Black Sea raises the possibility that Russian gas export monopoly Gazprom will not join the -4.6 billion ($6.19 billion) Nabucco project, led by Austria. A series of deals Russia has signed this year also threatens Turkey’s goal to become a major transit point for energy supplies from the oil- and gas-rich Caspian and Central Asian regions to the European Union. «The natural gas and petroleum projects suggested by Russia since the start of the year hurt the projects in which Turkey is involved, even though (Turkey) does not want to accept this,» the Turkish energy ministry official told Reuters. The 900-kilometer (560-mile) South Stream unveiled by Gazprom and Eni on Saturday would come ashore in Bulgaria, then branch to Austria and Slovenia in one spur and southern Italy in another. «Other parties likely to be less happy about this announcement are European regulators concerned about potential Russian dominance in gas supplies to Europe,» Citigroup said in a research note. Karamanlis took a different view of the issue. «Combined with the Burgas-Alexandroupolis pipeline and the one that goes through Turkey, it will turn the region into a new hub for the distribution of energy,» he told reporters after meeting with Putin on the fringes of the Black Sea Economic Cooperation Organization meeting. «Greece is ready to join it.» Russia, Greece and Bulgaria earlier this year agreed on a new oil pipeline linking the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupolis in the northern Aegean. Commission positive The European Commission also said it did not see the project as a competitor to Nabucco, saying any new infrastructure was helpful to secure energy supplies for the 27-nation bloc. «We see no opposition between the two projects. Any infrastructure that can match this demand is seen as a positive development by the Commission,» a spokesman for the European Union executive said. Putin said the South Stream as well as Northern Stream pipeline, which will run from Russia to Europe under the Baltic Sea, was in the interests of European consumers. «These are new projects for new contracts,» he told reporters. «They allow us to reach consumers in Europe directly.» Several European countries and Turkey launched Nabucco in an attempt to reduce reliance on Russian natural gas. Gazprom was later urged to join in recognition that it might be difficult for the project to succeed without Moscow’s gas. Nabucco would pump gas from Iran, Iraq, the Caspian and hopefully Russia via Bulgaria, Romania and Hungary to Austria. Nabucco has already been criticized for delays and the lack of a convincing timetable as well as apparent wavering among some countries involved in the project, especially Hungary. Sioufas sees benefits in diversification and energy security The Greek government takes a positive view of any development that would contribute to energy security in the region and Europe as whole, Development Minister Dimitris Sioufas said in response to questions on the South Stream plan yesterday. «We consider the new routing plan in our region as a positive development in diversifying Europe’s natural gas supply routes. As far as I have been informed, the European Commission takes the same view,» he said. «Greece and Italy are closely cooperating in a big project for both countries, Turkey and the producer countries in the Caspian Sea, that is, the submerged Greek-Italian gas pipeline which is supported by the European Commission and whose construction will begin in 2008. Greece, which has developed into a big energy hub in recent years for the transportation of oil, natural gas and electricity, supports this policy of the European Union for the diversification of the transit routes for energy resources and the strengthening of its energy security,» Sioufas said.

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