(Repeats with no alterations)
By Thomas Grove
ISTANBUL, July 9 (Reuters) - A raft of transit agreements to
be signed on Monday by the architects of the planned Nabucco
natural gas pipeline will give some much-needed shape to the
pipeline which has been delayed due to infighting.
But critics of the 7.9 billion euro ($11 billion) pipeline,
which plans to pump 31 billion cubic metres of natural gas to
Europe by 2014, say the meeting will do little to stop a
Russian-backed pipeline from gaining ground on the Europe-backed
project.
WHAT WILL BE IN THE AGREEMENT?
The agreement will be signed by five members of the
six-country Nabucco consortium through which the pipeline is
planned to run. They are: Turkey, Bulgaria, Romania, Hungary and
Austria. The sixth country, Germany, does not have a transit
role.
The five transit countries are likely to agree on a series
of legally binding conditions as well as agree on where the
pipeline will begin. Turkey has demanded that the line start
near Ankara, but other possibilities include Georgia and
Azerbaijan.
Security for the pipeline will also be ironed out in the
agreement, an important condition for easternmost Nabucco member
Turkey, which will be responsible for preventing attacks on the
pipeline. Last year the ethnic separatist group Kurdistan
Workers Party (PKK) carried out an attack on the
Baku-Tblisi-Ceyhan oil pipeline, halting supplies.
WHAT WILL THE AGREEMENT NOT INCLUDE?
One of the thorniest issues that has not yet been worked out
is a demand from the Turkish side for the right to use 15
percent of its gas for domestic use or for re-export. That issue
will all but certainly not be resolved in this agreement, but
rather will be worked out separately.
Turkey's Energy Minister Taner Yildiz has said Turkey will
not back down from the demand, but the European Energy
Commission has also stated that the demand is unacceptable.
Analysts say the demand makes the pipeline commercially
unfeasible as supply countries will be unwilling to sell
discounted gas to Turkey.
WHAT DOES EUROPEAN ENERGY SECURITY GAIN?
Nabucco was conceived as a way to decrease Europe's
dependence on Russian natural gas after Moscow turned off its
gas to Ukraine in 2006 in what was seen at the time as a
political conflict. Fear of future suppliers using energy as a
political weapon strengthened the case for the Nabucco.
Monday's agreements, although they will not address the more
divisive issues, will most likely boost investor sentiment in
the plan, which is suffering due to the economic global downturn
and lack of gas throughput supplies for the line.
Nabucco may also gain more seriousness in the eyes of gas
suppliers. "It might come as a good sign for countries that will
be potential suppliers, giving them an indication that Nabucco
is more serious than they might have thought," said Ana
Jelenkovic at Eurasia Group.
Working out Turkey's 15 percent demands, however, would help
put the Nabucco substantially ahead of the Russian-backed South
Stream pipeline in that the Nabucco Consortium could then begin
work on the open season, when firms buy up portions of the
pipeline's capacity for consumers.
The South Stream, which has increased its capacity
expectations to 63 billion cubic metres, edged ahead of Nabucco
late last month when gas-producer Azerbaijan said it would give
Russia priority in buying gas when the second phase of its
Shakh-Deniz gas production project came online.
WHERE ARE THE SUPPLIES?
No concrete deals have yet been signed for Nabucco, and none
are expected to be signed until all transit details are worked
out among its members. A lack of supply agreements have hampered
political will and financing, analysts say.
The Nabucco Consortium has mentioned Egypt, Azerbaijan and
possibly Russia and Turkmenistan as sources for gas. Iran can
participate in the pipeline if Washington normalises relations
with Tehran, the U.S. Secretary of State's Special Envoy for
Eurasian Energy said earlier this year.
For a graphic on the line
http://graphics.thomsonreuters.com/RNGS/JUL/NABUCCO.jpg
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