No Nabucco-South Stream merger on the horizon
16.03.2010 (17:22) | RBC
Russia is not weighing the option of merging certain legs of the South Stream and Nabucco- - - - - - - - - - - - - - - - - - - - - -
Russia is not weighing the option of merging certain legs of the South Stream and Nabucco pipelines, Russia's Energy Minister Sergei Shmatko told journalists in Moscow today. Shmatko explained that Russia was running a project of its own, which had already gotten all the necessary approvals.
“For European consumers, the more gas the better, so South Stream and Nabucco are hardly even rivals. Yet, we are looking forward to the day when Nabucco is there to compete with us,” the minister said.
As for South Stream’s progress, Shmatko stressed that Russia and Bulgaria were about to set up a joint special purpose vehicle to implement the project on the country’s territory.
The South Stream pipeline will be laid via the Black Sea from Novorossiysk to Bulgaria’s Port of Varna. Then, the route will fork out, with one leg heading across Greece via the Adriatic Sea to the south of Italy, and the other one leading to Hungary and Austria via Serbia. The pipeline’s capacity is planned at 63bn cubic meter of gas a year, with the launch scheduled for 2015.
It is presumed that Nabucco will carry natural gas from Central Asia and the Caspian region to Central Europe passing through Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania and Austria. Initially, the pipeline was scheduled to be put into operation in 2011, but the deadline was later pushed back until 2013. According to estimates, the project will cost EUR 7.9bn to complete.
Meanwhile, analysts have questioned whether the future demand for gas will actually cover the investment in Nabucco. They also point to the lingering uncertainty regarding which sources will supply the gas for the pipeline to carry. Not one deal has been made so far with gas suppliers for the Nabucco project.
The consortium implementing the Nabucco project, including Austria’s OMV, Germany’s RWE, Hungary’s MOL, Turkish Botas, Bulgarian Energy Holding, and Romania’s Transgaz, plans to make the final investment decision by the end of 2010, after collecting bids from prospective clients in order to properly estimate the demand.
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