Turkey, EU Countries Sign Nabucco Gas Pipeline Deal

By Asbarez | Tuesday, 14 July 2009

ANKARA (Hurriyet)-The leaders of Turkey and four EU countries signed a long anticipated agreement on Monday aimed at reducing Europe's reliance on Russian energy, reported the Turkish Hurriyet Daily.

Turkish Prime Minister Recep Tayyip Erdogan and his counterparts from Austria, Bulgaria, Hungary and Romania signed the intergovernmental deal to allow the EU- and U.S.-backed Nabucco pipeline to cross their territory, as uncertainty about potential gas suppliers continues.

Erdogan hailed the deal as an "historic moment," but added, "The job is not done with the signing - on the contrary it just begins" at the ceremony in Ankara.

He said the legal framework for the construction of the pipeline would be completed once the Nabucco consortium signs separate agreements with all five participant countries within a targeted period of six months.

"The more steps we take [on realizing the project], the more the interest of supplier countries will grow," he said.

The project, long delayed by lack of commitment from suppliers, is planned to become operational in 2014 at an estimated cost of 7.9 billion euros ($10.9 billion), and a capacity to pump 31 billion cubic meters of gas from the Caspian Sea to Austria via Turkey and the Balkans, bypassing Russia.

In a sign of the importance attached to the project, European Commission Chief Jose Manuel Barroso, Prime Minister Nouri al-Maliki of potential supplier Iraq, and U.S. special envoy for Eurasian energy Richard Morningstar also attended the gathering.

A quarter of all the natural gas used in Europe currently comes from Russia, with several southern European countries depending almost exclusively on Russian supplies.

The Nabucco project aims to avoid a repetition of the cut-offs that have disrupted supplies to Europe in recent years during the coldest winter months.

"We have started to confound the skeptics, the unbelievers. Now that we have an agreement, I believe that this pipeline is inevitable rather than just probable," Barroso said.

"Nabucco will provide energy security to Turkey, to southeast Europe and to Central Europe. Nabucco is thus a truly European project," Barroso said. "Turkey and the EU have tackled together a common challenge: the security and diversification of their energy supplies."

No Guaranteed Supplier

The project, however, still has no guaranteed supply of gas.

Iraq, Egypt and Syria say they are ready to provide gas to the project. Turkmenistan said Friday that it is prepared to provide natural gas to the project. Azerbaijan, which has signed a deal with Russia to provide gas to Nabucco competitor South Stream, has also signaled a possible contribution, raising hopes of securing enough suppliers to make the pipeline viable.

Erdogan said Turkey wants Iranian gas to be carried to Europe through the Nabucco pipeline when set conditions are met, and added he believes that in the future Russian gas would also pass through the 3,300-kilometer pipeline to reach the European market. He also thanked Iraqi authorities for their support and contribution to the process as a supplier country.

Maliki said during the gathering that Europe could receive 15 billion cubic meters of Iraqi gas via Turkey, Reuters reported. But it was not immediately clear if the sale of 15 billion cubic meters of Iraqi gas was for Nabucco.

U.S. officials told reporters prior to the summit that the United States does not object to Russia's participation in the project.

Morningstar was quoted by The Associated Press as saying that the United States is trying to engage with Russia in the field of energy. Morningstar, however, added that Washington opposes Iran's participation in the project until the country normalizes ties with the West.

U.S. State Department spokesman Ian Kelly hailed the deal in a statement released later on Monday, saying "this agreement is a significant milestone in achieving our shared vision of opening a new energy corridor that will bring Caspian gas to Europe."

Turkey's EU bid to be boosted

Erdogan said the pipeline "will elevate Turkey to a significant position" in the European energy security and help boost his country's struggling EU membership bid.

"Even if you make an assessment only from the perspective of energy, it is clear that Turkey should be a member of European Union," the candidate country's prime minister also said.

Barroso praised Turkey's role, saying the project "could open the door to a new era in relations between Turkey and the EU, and beyond."

"What we are witnessing today is a powerful illustration of the strategic bonds between Turkey and the EU," he said.

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