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Home / News / Today's Headlines / Turkey to Sign Nabucco Accord By June

08.05.2009

Turkey to Sign Nabucco Accord By June

Rodoslav Tomek, Bloomberg

Turkey agreed to complete talks on an intergovernmental agreement on the Nabucco gas pipeline project and sign an accord by the end of next month.

The pledge came in a statement released in Prague today by the Czech presidency of the EU following a meeting between European Union officials and leaders from Turkey and five Central Asian countries. The pipeline is designed to carry gas from the Caspian region to Europe via Turkey and Austria.

The Nabucco pipeline, which would bring gas to Europe via Turkey, has faced delays because of lack of commitments from customers and suppliers. EU governments see Nabucco as a means to diversify gas supply after a pricing dispute between Russia and Ukraine cut shipments to Europe in January.

The EU and Turkey agreed “to finish the negotiations of the intergovernmental agreement on Nabucco as quickly as possible” and “to sign it by the end of June 2009 in Turkey,” the Czech presidency said.

EU Commission President Jose Manuel Barroso told reporters after the meeting he is “confident” Turkey will sign a gas transit deal soon. Earlier today, EU Energy Commissioner Andris Piebalgs said talks with Turkey “have very much advanced.”

Gas will start pumping through Nabucco to Europe by 2015, two years later than planned as more time is needed to obtain gas commitments, Andris Piebalgs said in January.

Pipeline Partners

The pipeline would run from the Turkish border with Georgia or Iran via Bulgaria, Romania and Hungary to Austria’s Baumgarten hub. The venture, founded in 2004 and based in Vienna, is led by Austria’s OMV AG.

Partners include Budapest-based Mol Nyrt., Germany’s RWE AG, Bulgaria’s Bulgargaz EAD, Romania’s Transgaz SA and Ankara- based Botas.

European Commission energy spokesman Ferran Tarradellas said Feb. 19 that the EU may reduce planned aid for the venture by 20 percent to help spread EU subsidies over more energy projects.

The European Commission is proposing to scale back its support for the Nabucco project to 200 million euros ($268 million) from 250 million euros, Tarradellas said in February. The aid would be channeled through the European Investment Bank.

Rival Plans

Last month Azerbaijan’s President Ilham Aliyev said on a visit to Moscow that his country was interested in signing a natural-gas agreement with Russia that would allow it to boost output and exports to Europe as the Nabucco project remained “at a standstill.”

Such an accord may reduce the potential for Azerbaijan to become a rival to OAO Gazprom, Russia’s state gas exporter, in supplying European markets.

Today’s statement, signed by leaders of the EU, Azerbaijan, Georgia, Turkey and Egypt, also said the European Union and Egypt should “agree on specific projects in developing Egypt’s gas reserves and export potential for the EU.” It said it was signed “in the presence of the representatives of Kazakhstan, Turkmenistan and Uzbekistan.”

The statement also called for a memorandum of understanding on energy between the EU and Iraq “as soon as possible.” Barroso said a preliminary energy accord with Iraq was “imminent.”

- Copyright 2009, Bloomberg. All rights reserved.  

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