Even though the Nabucco project deal has been signed in Ankara many questions remain about how it will be financed and where the gas to be transported will come from.
Costing 7.9 billion euros, the pipeline is designed to transport gas from the Caspian and Middle East from 2014. It would carry 31 billion cubic metres every year to supply about five percent of Europe’s gas needs. Gas could come from Azerbaijan, plus Turkmenistan, Iran, Iraq, Egypt and possibly even Russia. Turkmenistan has said it is now ready to supply gas for the Nabucco pipeline, after recently clashing with Moscow over gas imports. Hungary’s Prime Minister Gordon Bajnai told euronews that Iran’s involvement is likely to be some way off: “Iran has huge reserves therefore it would be a very interesting source of supply. There are huge political and economic difficulties at the moment and I think those need to be overcome first, if you speak realistically to have Iran join this consortium.” This is just one of several proposed gas pipeline projects into Europe. Russia’s nearby rival plan is South Stream into Bulgaria and on to Italy. In May, Italian energy company Eni and Russia’s state-owned Gazprom signed agreements on South Stream in a ceremony overseen by the two countries’ prime ministers, but as with Nabucco, there could be financing issues. Gazprom is Russia’s most indebted company. It is carrying the equivalent of over 28 billion euros of debt. It wants to invest 10 billion euros in South Stream, but lower energy prices and lower exports due to the recession are making things more difficult for Gazprom.