Senior Russian Politican Takes Aim at Nabucco

EU-sponsored gas transit pipeline project has no future, according to Russian Deputy Prime Minister

Russian Deputy Prime Minister and energy tsar Igor Sechin, has made a very strong statement on the prospects of the Nabucco gas pipeline, competitor to the Russian backed South Stream project.

"Given the estimates of the Turkmen side, as well as European and international experts, the current market situation on the gas track allows us to say and I say so without sarcasm that there are no prospects for Nabucco,"  Sechin told reporters as cited by RIA Novosti.

"There are no real prospects of increasing volumes, which makes the Nabucco project irrelevant. This can be forgotten until a certain moment of economic growth," Sechin said.

Reinhard Mitschek, managing director of the Nabucco Gas Pipeline International GmbH., said last week that the consortium expected to begin the construction of the pipeline in 2012 and to launch it in 2015. Project participants expect significant volumes of gas from Azerbaijan, Turkmenistan and Iraq to fill the pipeline, he added.

The Nabucco project plans to move gas from the Caspian region to European countries via Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania and Austria, is a key element of western Europe's strategy to cut its dependence on Russian energy supplies.

Sechin said the by the time Nabucco is expected to be launched – 2015 – Russia will have launched its own pipelines North Stream and South Stream.

He added that the South Stream "will take precedence over the terms, sources of supply."

"The conclusion is: Nabucco has no future," Sechin said.

Sechin’s comments come after Russia and Bulgaria announced an agreement to set up a joint venture for South Stream.

"In line with the arrangements reached over the last weeks, an agreement which will set a new pace for working on the project in Bulgaria was signed today," Gazpom CEO Alexei Miller said.

The Kremlin said Russian Prime Minister Vladimir Putin secured the deal with his Bulgarian counterpart Boyko Borisov during a telephone conversation. Gazprom and Bulgarian Energy Holding will set up a joint venture for building the Bulgarian section of South Stream by November 15th.

Bulgaria is expected to become the point of geographic crossing of the two competitive pipelines, Nabucco and South Stream.

The country had previously been described as the "problematic" country balking at the construction of South Stream in order to exact benefits from Moscow.

The prospects of the pipe bypassing Bulgaria by going through Romania, Serbia and Macedonia are believed to have forced the Bulgarian government into agreeing to go head with the project.

"Putin and Borisov agreed that a Russian-Bulgarian joint venture to develop a feasibility study for the Bulgarian section of the pipeline will be created before Nov. 15 of this year," Russia's state-run news agency RIA Novosti quoted the Kremlin as saying.

Russia's gas giant Gazprom and Bulgarian Energy Holding  signed an agreement outlining the mechanisms of cooperation between Bulgaria's holding and Gazprom during the implementation of the assessment of the pipeline on Bulgarian territory and sets the timeline for this cooperation on Friday.

"In line with the arrangements reached over the last weeks, an agreement which will set a new pace for working on the project in Bulgaria was signed today," Gazpom CEO Alexei Miller said.

Borisov in early October said he was coordinating his country's position with Turkish and Georgian interests in the planned Nabucco pipeline. He noted the European Union had set aside roughly $275 million for the multibillion-dollar project. Sofia, he said, needed another $80 million to build connections to the pipeline.

Source: RIA Novosti