NABUCCO – one more time

Speculation about the NABUCCO project started during the presidency of George W. Bush, during which time European countries were divided into two camps. Old EU members did not see much necessity for the project, whereas the majority of the new EU members, mostly from central Europe, were actively trying to facilitate its implementation. Austria is one of the ‘old Europe’ countries supporting the project. The project has recently received some viable options. A final decision will be taken at the end of 2010 or beginning of 2011. If decisions are positive, construction should begin by the end of 2011 and take 3-4 years, with the first gas being transited in 2014. It is likely that while Iraq will be involved in supplying gas for the NABUCCO project, for now it seems the major exporter will be Azerbaijan, which promises to pump gas from Shah Deniz. Azerbaijan is very keen to start a new stage in the Shah Deniz project as soon as possible.

Analysts are curious whether NABUCCO will be able to create a sufficient alternative supply of natural gas for Europe and thus compete with Russian Gazprom. Until now Gazprom is the leader in providing natural gas to Europe and this is a major concern of the NABUCCO promoters. The projected annual volume of gas the NABUCCO pipeline will transport is 31 billion cubic meters. Gazprom already provides EU countries with 120 billion cubic meters per year and is planning to increase its supply by 55 more billion cubic meters in the next couple of years.

Of course NABUCCO's capacity cannot be compared with Gazprom's potential, however it is still an option and more importantly it makes Russian concerned, as Russia is keen to monopolise European supply and therefore keep the whole of Europe in its hands.