End of Nabucco project?

By Grigory Kutovoy, President of Independent Energy Alliance

Signing an agreement with Austria the Russian side may start design work on South Stream project. According to Gazprom CEO Alexey Miller Russia will start supplies from the new pipe already in 2015. Remarkably Vienna - one of the gas destinations on Nabucco's way to Europe - prefers the competitor. Does the Western project for supplies of primary materials have a future after this turn of events?

As Alexey Miller reported, now all legal documents required to start construction of South Stream gas pipeline are coordinated. "Austria is the seventh country we signed an inter-government agreement on the gas pipeline with", - Vesti quote. - Today we say that the project is real and we can start design work. From this day on we can easily calculate the time of South Stream implementation.

> South Stream On The Map Of Europe
Specifications of the South Stream Project
Last week Russian PM Vladimir Putin was in Austria to coordinate all details of cooperation with Chancellor Werner Feimann since now it's Austria that receives Russian gas to pass it on to Germany, France, Italy and Hungary. Now however Ukraine acts as a transit state, kp.ru writes. After all necessary documents are finalized and South Stream is implemented the raw materials will come to Europe directly. Russian prime minister promised that this step guarantees stable, reliable and absolutely secure supplies to Austria.

> Nabucco Pipeline Map

Curiously enough, Austria - considered by many as the main driving force for Nabucco project - has preferred the Russian option. At the time of Putin's visit Chancellor Werner Feimann expressed doubts over Nabucco's resource base stating: "We don't know whether gas will really be there yet". To which Russian PM remarked that a pipe can't be constructed without contracts. "Please, tell me about at least one contract on Nabucco?" - Putin asked the rhetorical question.

However, it seems there is not the time for the European project aimed at acquisition of alternative sources of primary materials for the West to be rejected. Recently the project syndicate announced the tender for pipeline infrastructure construction. Some specialists think that at this stage Nabucco is even ahead of competing South Stream, Caucasian Knot reports.

Can Moscow-Vienna agreement become a kind of stimulus for Nabucco? And what are the chances for the Western project to win over its Russian rival? This is what GeorgiaTimes discussed with some experts.
Alexander Pasechnik, head of analytical department of the National Energy Security Foundation
So far I have noticed no reaction to the signed Russian-Austrian agreements on South Stream from OMV concern (operating Nabucco). However, implementation of the Russian project is beyond doubt since Austria, one of Russia's key partners, will be a distributing country. Nabucco has problems - both in finance and resources. Now there are rumors that if cost-effectiveness of this project is prejudiced it can be suspended or completely wound up. It should also be remembered that Nabucco is a capital-intensive project and after the crisis the Europeans have grown more cautious. No one will waste money starting this project. Besides now there are fewer "horror stories" about Gazprom. That is why the future of both Russian streams considerably overpasses Nabucco's prospects. And though Europeans will most likely try to counterpoise this project to the Russian one, Nabucco's chances are poor.
What's the explanation for Nabucco pipeline infrastructure tender?

It is part of a preparatory program and looks more like a trial balloon. This is an attempt to check to what extent the market and investors are interested in the project. Tough competition will prove there is still ideological faith in Nabucco. But if only one company competes, that will show the investors' doubts over the project viability.
Sergey Demidenko, an expert with the Institute of Strategic Analysis and Evaluation
It is still unclear what Nabucco is. This is a phantom project. It is still a mystery where gas for the project will be taken from. And this uncertainty will remain as long as Iran continues to stick to its current position. Nabucco has not a single seam, not a single well. Only diplomatic wandering. So it's rather unwise to match Nabucco and Southern Stream since the Russian project has a real background. There are uncertainties too like where gas will be taken from but Nabucco is pure illusion, fantasy.

Once this project was used to scare Russia as a pipeline to bypass the Russian Federation. Even believing that Iran, a future gas empire, will be available for Nabucco this is only a prospect now since nothing has been developed there. Referring to Turkmenia it is more China-oriented.
What's the explanation for Nabucco pipeline infrastructure tender?

Frankly speaking, all this is quite strange. I will repeat: it is unknown where Nabucco will take gas from. How can anything be built when it's unclear where it all will start from. Such information sounds good for fans of geopolitics, not for energy people.
Georgia Times