Stefan Judisch, CEO of RWE Supply & Trading, a partner in the Nabucco pipeline consortium, says the gas pipeline enjoys strong European support.
"Nabucco will bring security of energy supply to southeast and central Europe, which is what makes it a truly European project,” the president of the EU Commission, José Manuel Barroso, said confirming the unanimous intent of Europe to start a new chapter in its external energy relations – with the Caspian Region and the Middle East. Thus, in my view, it is surely out of the question to suggest a lack of inner-European consensus or commitment to Nabucco, as Luba Azarch from the German Society for Foreign Policy recently claimed in an interview with News.Az, Much of EU lukewarm on Nabucco pipeline project.
In fact, there is strong evidence to the contrary. According to Spain's foreign minister, Miguel Angel Moratinos, whose country currently holds the presidency of the EU Council, Europe will continue to support the development of the Southern Corridor and the Nabucco project in particular. As such, Nabucco has asked to join the list of Trans-European energy networks and applied for 200 million euros under the European Economic Recovery Plan. It is clear that Germany is also a serious advocate of Nabucco. Federal Chancellor Angela Merkel has repeatedly supported the venture. It was also specifically mentioned as the foundation of the new foreign policy on energy in the Federal Government’s coalition agreement.
Closer ties with Caspian countries will pave the way for a new policy of diversification. This invites a win-win-situation for Europe and the Caspian region and the Middle East. With Nabucco, Europe will benefit from both access to new sources of gas transported via new routes, while the Caspian region will be linked to one of the biggest demand markets for gas in the world. On the top of that, Nabucco will guarantee the most secure transit route and the best price for Caspian gas going to Europe. Accordingly, this new policy topped the agenda when Angela Merkel met Azerbaijani President Ilham Aliyev on 5 February in Berlin. During a press briefing, the chancellor praised their economic relations, stressing the importance of using "our big potential" to boost bilateral cooperation. Merkel offered German assistance to Azerbaijan, describing the country as "a significant partner" and an important oil and gas producer. Meanwhile, President Aliyev stressed Azerbaijan’s determination to become a major energy partner for Europe. "We are ready to provide a significant contribution towards Europe's energy security," he said, reiterating his country’s support for Nabucco.
It is important to point out that Nabucco already has strong political backing in the form of the Intergovernmental Agreement (IGA), signed on 13 July 2009 in Ankara, by the governments of the transit nations. Turkey is going to complete the ratification process soon as the fifth country of the Nabucco Consortium to endorse the agreement, following Hungary (October 2009), Austria (December 2009), Bulgaria and Romania (February 2010). Under the IGA, these transit countries guarantee to facilitate the construction and operation of Nabucco as well as secured transit rights for gas shippers and suppliers. No other mooted project in the Southern Corridor could offer such a secure framework.
Meanwhile, the Nabucco Consortium is working intensively to get the project off the ground. RWE is in fruitful discussions with gas-rich countries Azerbaijan and Turkmenistan over gas supply contracts, with concrete progress anticipated in the first half of this year. Discussions between the Nabucco partners and financial institutions are also well under way, as are preparations for investigating the environmental and social impacts of the project. This year, the members of the Nabucco Consortium will make final decisions on financing and building the pipeline, and construction is expected to commence from 2011. The first gas from the Caspian region should head towards Turkey and Europe by 2014-15.
Gas drives partnership
Producer countries like Azerbaijan, Turkmenistan and Iraq are waiting for Nabucco to become a reality. While these countries are already known in the oil and gas industry, it would be an oversimplification to limit the Southern Corridor to a pipeline for gas. Nabucco will also be a catalyst for building partnerships beyond the energy sector. As an example, RWE signed a partnership agreement with Turkmenistan in April last year. While this included exploration of new gas fields and the signing of gas supply contracts, it also contained cultural and educational exchange programmes.
I myself have had several opportunities to meet the political leaders of Turkmenistan and Azerbaijan. My impression is that these countries are not only ready and willing to develop energy relationships with Europe, but want to build closer personal and cultural ties as well. We in Europe would do well to read these signals carefully. It would be arrogant to expect the Caspian region to embrace Western values. But with developing closer relationships, understanding for each other's values will grow.
A unique opportunity
In a nutshell, this is why alleging the involvement of a one-sided, single-interest energy policy is wrong. Europe will increasingly have to import more gas, given its own dwindling resources. According to Cambridge Energy Research Associates, Europe will have to double its natural gas imports by 2030 to some 476 billion cubic metres. Russia, Europe’s largest traditional supplier, will not be able to shoulder this alone.
Azerbaijan, Turkmenistan, Iraq and – potentially – Egypt are opening up new gas fields and increasing production. Their goal is to expand export markets and avoid one-sided dependency. After all, Central Asia has so far supplied almost half of the natural gas piped to Europe via Russia. If Turkmenistan continues to export to Russia and agrees supply contracts with China and India, this is by no means a step backwards for Nabucco as this country holds – according to BP’s Statistical Review of World Energy – the world’s fourth largest gas reserves. Turkmenistan is not short of resources, it will boost export capacity.
In other words, if these countries want to profit from their wealth of raw materials, Europe cannot expect preferential treatment. Yet Turkmenistan and Azerbaijan, as well as Iraq, have declared on several occasions that they want to expand gas exports to Europe, and that Nabucco is their first choice. How can gas, therefore, be referred to as “elusive”? It is very real indeed.
In my view, Europe has a unique opportunity to source gas directly from Central Asia, instead of via circuitous routes. We should make the most of this opportunity by backing Nabucco. Russia will continue to be a vital gas supplier to Europe and projects like the Baltic Sea pipeline are equally important. However, the Southern Corridor between the Caspian region, the Middle East, Turkey and Europe, is a symbol for a new and enduring partnership. Or, as President Barroso so aptly puts it: “Gas pipes may be made of steel, but Nabucco has the ability to cement relationships between our peoples.”
Stefan Judisch, CEO RWE Supply & Trading, Germany for News.az
RWE is one of the shareholders in the Consortium to build and operate the Nabucco gas pipeline.