ECONOMY

Nabucco rivals South Stream

The Nabucco natural-gas pipeline will ship gas to Europe for as little as half the cost of an alternative, Moscow-backed route from Russia, US Deputy Assistant Secretary of State Matthew Bryza said. The Nabucco pipeline «will be built, I am convinced, because it makes commercial sense,» Bryza told journalists yesterday in Brussels after meeting with European Union officials. Nabucco will bring gas from the Caspian region across Turkey to Western Europe, reducing the European Union’s dependence on Russian energy exports. The pipeline will ship 30 billion cubic meters of gas a year and begin operating in 2013. Moscow-based OAO Gazprom, which today controls almost all natural gas exports from Central Asia and supplies a quarter of Europe’s gas demand, advocates another route under the Black Sea called South Stream. Shipping gas along the Nabucco pipeline will cost 50 percent to 40 percent less than along South Stream, Bryza said. The cost of the two projects is difficult to compare until the exact route is chosen, said Dmitry Loukashov, oil and gas analyst at UBS AG in Moscow. Laying Nabucco across mountains in Turkey would significantly increase the price, he said. «The undersea South Stream could be cheaper than the on-shore Nabucco; we need to look carefully at the route,» he said. Enough gas The former Soviet republic of Azerbaijan on the Caspian coast has enough gas to supply Nabucco alone, Bryza said. The pipeline could also carry gas from northwestern Iraq, and eventually take natural gas from Iran if political relations with Europe and the United States improve, Bryza said. Iran has the second-biggest natural gas reserves in the world after Russia. Nabucco partners are RWE AG, Turkish state pipeline company Botas, Bulgaria’s Bulgargaz AD, Romania’s Transgas and Austrian and Hungarian oil companies OMV AG and Mol Nyrt. (Bloomberg)