The project of Nabucco gas pipeline as an attempt to promote the spirit of friendship and cooperation in the regionor a new energy Cold war beginning in Europe.
The most recent conflict between Moscow and Kiev in January 2009 over natural gas supplies has reignited the controversy over new transit routes. Europe could get its future gas from the highly controversial Nord Stream pipeline to the north or via the Nabucco pipeline to the south. But will either ever get built? Nabucco project still offers something the Gazprom scheme can't -- an opportunity for the EU to reduce its dependence on Russian natural gas. With the Nabucco project finally taking off, Russia has suffered a huge setback in the geopolitics of energy in Eurasia
Russia's energy power play. "[Russia's] actions relative to essentially blackmailing a country and a continent on natural gas, what did it produce?"(Biden vice President of USA) Every country in Europe is so concerned about Russia, and do not want other winter without gas.

Additionally the only region with rich gas reserves, which is not yet connected with the European markets via pipeline, is the Caspian Region, Middle East and Egypt.

The EU-27 gas consumption will rise to 0.58 trillion cubic meters a year (cm/y) in 2010 and to 0.73 trillion cm/y in 2030 . In the same period, its reliance on imports will increase to 74% (compared with 41% in 2005). That causes two problems. First is about how to make gas imports more reliable; second is how to find the incremental 150 bcm/y which the EU will need it the following two decade.

Nabucco's commercial success is considered a frail reed, and it may be reliant on EU and US government backing. The EU has already designated €200 million ($278 million) in start-up funding, with more to come as part of a stimulus package distributed in 2009 and 2010.

By attacking its small neighbor, Russia effectively warned not only Georgia but the whole neighborhood. Today's gas war is a zero-sum conflict similar to the scramble for resources that divided Eurasia in the 19th century. Planned pipeline Nabucco and south stream really divided the whole Europe.

The Nabucco project represents a new gas pipeline connecting the Caspian region, Middle East and Egypt via Turkey, Bulgaria, Romania, Hungary with Austria and further on with the Central and Western European gas markets. The pipeline length (56”) is approximately 3,300 km, starting at the Georgian/Turkish and/or Iranian/Turkish border respectively, leading to Baumgarten with the following sections in the partner countries: • Turkey: 2000 km • Bulgaria: 400 km • Romania: 460 km • Hungary: 390 km • Austria: 46 km

Nabucco pipeline would carry up to 1.1 trillion cubic feet of natural gas a year from the Caspian Basin to Vienna, traversing many a former Soviet satellite along the way. A competing Russian project, South Stream, would flow from Russia across the Black Sea and ultimately terminate in Italy and Austria. Fifteen of the world's 20 largest oil companies are now state-owned

Europe gets a quarter of its gas from Russia, with 80 percent of it passing through Ukraine. Some countries, like Bulgaria, are almost entirely dependent on Russia's Gazprom for their gas and were left shivering after the supply through Ukraine was cut earlier this year. At one point, Slovakia threatened to restart some of its Soviet-era nuclear reactors.

Eighty percent of natural gas from Russia travels to Europe through Ukraine, but the desire to do something about it only materialized with the gas disputes that broke out between Ukraine and Russia after the 2004 Orange Revolution.

Without Azerbaijan, Nabucco is a non-starter. For the project to be initially viable, Azerbaijan will need to provide 283 billion cubic feet of gas per year, roughly a quarter of the pipeline's capacity. In April,2009 Russian President Dmitry Medvedev hosted Azeri President Ilham Aliyev in Moscow to discuss Russian purchases of Azerbaijan's gas. And then in June, they inked an agreement in which Azerbaijan promised to sell Russia up to 500 million cubic feet of gas -- at well over market rate -- from its offshore gas field, Shah Deniz.

But Russia has its own dependencies Russia needs security of demand, that those who are on the other end of their pipelines will definitely buy their gas, Russia turned off the gas tap to Ukraine. As a result, various countries ended up without natural gas, including Bulgaria and Slovakia, whose gas supplies from Russia travel through the same pipeline.

The Russian newspaper Kommersant commented, “It has become clear that Nabucco is significantly ahead of South Stream, owing to the fact that the project has the consolidated political support of practically the whole of Europe.""Gazprom's brainchild, South Stream, cannot boast such consolidated support,” the newspaper added.

Fischer Forgien minster of Germany from 1998-2005 and head of green party made the breach with Schröder official He signed up with a rival consortium -- energy companies from Turkey, Bulgaria, Romania, Hungary, and Austria that have joined together to build the $11 billion Nabucco natural gas pipeline. Nabucco would bring gas from Middle Eastern and Caspian fields across Turkey's Anatolian plateau, and north into Europe. The pipeline is backed and partly funded by the EU and is strongly supported by the United States.

In this opera, Turkey has been cast in one of the leading roles. With its indispensable geographic position between the oil and gas reserves of Iraq, Iran, and the Caspian, it is an absolute certainty that Turkey will host major pipelines sooner or later. If Nabucco succeeds, Turkey could be the biggest winner, both economically and geopolitically -- a fact not lost on Russia or Europe. Or Turkey.Russia try to Corner turkey early but now signed a deal with turkey for South stream gas pipeline.


Next door to Turkey in Bulgaria -- the poorest member of the EU and a transit state for both the Nabucco and South Stream pipelines -- Ognyan Minchev, head of the Institute for Regional and International Studies, said how Moscow threatened the Bulgarians in 2006. Scrap an agreement with Gazprom and sign a new contract with higher prices for Russia and lower transit fees for Bulgaria, they were told, or else the gas would be cut off. "The Bulgarian government is obedient to Russia," Minchev said. "Bulgaria has put the entire energy system in Russian hands."

Further along the Nabucco route, in Hungary, Laszlo Varro has similar fears. the Russian energy giant Surgutneftegaz had recently acquired a decisive stake in the Hungarian energy firm MOL, where Varro is head of strategy. "It is one of the least transparent energy companies -- in Russia

Surgutneftegaz is run by Vladimir Bogdanov, an oligarch who managed Putin's 2000 presidential campaign in western Siberia. The secretive Surgutneftegaz has offered almost twice the market value for its shares in MOL. Varro and others see a sinister reason for this seemingly illogical behavior: MOL is a Nabucco consortium member, and by buying this stake, Surgutneftegaz can cut off funding for the pipeline and cripple it in Hungary.

Russian firms are making similar acquisitions in Austria, which is the proposed end of the road for both Nabucco and South Stream. Centrex Europe Energy & Gas, an opaque gas trading firm with ties to Gazprom, makes its money buying cheap gas from Russia and reselling it for profit in Austria.

The German magazine Stern recently traced Centrex's profits back to a company registered to a phony address at a drab Soviet-style housing block in Russia. And yet, Centrex recently entered into a partnership with Gazprom. Germania to take a 20 percent stake in Austria's Baumgarten trading platform and storage facilities, where the two rival pipelines will literally terminate. Considering that Gazprom already holds a 30 percent share in Baumgarten, this means that Russia's state-run energy company now controls half of the most important gas storage and distribution system in central Europe -- and the future terminus of Eurasia's competing southern pipelines.

On July 13, beneath the crystal chandeliers of an Ankara hotel ballroom, the prime ministers of Turkey, Bulgaria, Romania, Hungary, and Austria signed a Nabucco treaty describing exactly how the pipeline would operate and how tariffs would be calculated. Several days after the announcement that Nabucco had hired Joschka Fischer Iraq looks increasingly likely to play a large role in supplying Nabucco -- possibly larger than that of Azerbaijan.

The project is being developed by Nabucco Gas Pipeline International GmbH which is an Austrian registered company formed in 2004. The lead partner in the project is OMV of Austria and the remaining partners include: MOL (Hungary), Transgaz (Romania), Bulgargaz (Bulgaria), BOTAŞ (Turkey) and RWE (Germany – joined in February 2008) – all partners hold an equal 16.67% share of the project.

The pipeline project has also been included in the EU Trans-European Energy Network programme and a feasibility project for it was completed in 2004 (consortium was then called the Nabucco Company Pipeline Study GmbH) with 50% of the funding coming from an EU project grant (a Nabucco, which is overseen by a consortium of five European energy companies – one from each of the five countries the pipeline would cross – is scheduled to break ground in 2009 and involves several construction phases. The pipeline is expected to be on line by 2012, pumping gas in an initial phase between Turkey's borders with Georgia and Iran along a 2,050-mile route through Turkey, Bulgaria, Romania, and Hungary before ending in Austria, which would then distribute the gas across other European networks.

By some estimates, Iraq could provide more than 500 billion cubic feet of natural gas per year by 2014, when Nabucco is expected to be up and running. All of the major players -- Arab Iraqis, Kurdish Iraqis, and the Turks next door -- want to see Iraqi gas heading north through Turkey and into Europe. Recently, a Hungarian and an Austrian energy firm, both Nabucco consortium members, made deals to take 10 percent apiece in the $8 billion Pearl Petroleum gas project in Iraqi Kurdistan.
The Nabucco pipeline will ultimately be able to pump 31 billion cubic meters of gas per year by 2020, or about five to ten percent of the total gas consumption of the EU by that timeThe Nabucco project is seen as a rival to Russia's South Stream gas pipeline designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries. The project involves Bulgaria, Serbia, Hungary, Italy and Greece.
Russia's transit disputes with its former Soviet neighbors have raised concerns in Europe about too much energy dependence on Russia.
South Stream is intended to deliver Russian and Central Asian gas to Europe. It will run from the Beregovaya compressor station on Russia's Black Sea coast underwater to the port of Varna in Bulgaria. From there, it will divide into two - the south-western route would cross Greece and the Ionian Sea to southern Italy, while the north-western pipeline would go through Serbia and Hungary to end in Austria

South Stream's capacity would be increased from the original 31bn cm/y to 47bn cm/y. "We are not only planning to launch the Nord Stream with a capacity of 55bn cm and the South Stream with 31bn cm capacity, but also to increase South Stream's transit capacity by another 16bn cm.

Gazprom is very likely to have losses. The devaluation of the ruble has already increased the debt burden of Gazprom to the level, at which getting new loans is impossible."
Even though, having the second largest gas-reserves in the world, Iran import from Turkmenistan. In 2005, domestic consumption reached as high as 8.6 bcf/d, and Iran imported roughly 200 million cubic feet (approximately 5.8 million cubic meter) of gas per day. Also, domestic demand is expected to grow with 7% annually in the next decade

As mentioned-above, Iran’s gas reserves are located in the non-associated undeveloped or partially developed fields, which are located in the south which there are include major non-associated gas fields:
- The South Pars (280-500 tcf (approximately 8.2-14.7 tcm) of gas reserves – an extension of Qatar’s North field)
North Pars (50 tcf) (approximately 1.4 tcm),Kangan (29 tcf) (approximately 0.85 tcm)- Nar (13 tcf) (approximately 0.38 tcm),Khangiran (11 tcf) (approximately 0.32 tcm)

All of these reserves are huge, but there is necessary a big investment in order to produce and transport them to the EU market. Of course, the US sanctions against Tehran's nuclear program have made the Western energy firms' investment in Iran very difficult.

Turkmenistan currently produces about 80 bn cm annually, out of which about 50 bn cm was sold to Russia in recent years. However, supplies to Russia have been almost entirely cut off since an explosion in April on the Soviet-era Central Asia-Centre pipeline, which transports Turkmen gas to Russia.

Meanwhile, Turkmenistan has agreed to increase its contracted gas supplies to China to 40 bn cm via a pipeline nearing completion by end-2009. In addition to that, Turkmenistan has agreed to step up its gas supplies to Iran and is now hoping to supply Nabucco. Turkmenistan clearly intends to cut back its dependence on Russia for marketing its gas and is instead tying up alternate arrangements to access the world market

Azerbaijan’s reserves are calculated between 1.35 and 2.30 tcm, but the country became a net exporter only in 2007. Azerbaijan supposed to provide 20 bcm/y, Turkmenistan is expected to deliver the remaining 10 bcm/y

According to the Oil and Gas Journal, as of January 1, 2009, Syria's proven natural gas reserves are estimated to be 8.5 trillion cubic feet (Tcf). In 2008, Syria produced an estimated 213 billion cubic feet (Bcf) of natural gas, with 218 Bcf consumed and 5 Bcf imported.

It is really interested now for energy EU and Russia Companies are hiring the heavy weight Politician for lobbing for their interst.Gazprom has Schröder and other Consortium has Fischer. But reality is that to USA and EU want to less dependent on Russia gas. One thing is clear now South or Nabucco gas pipeline winner is Turkey and Iran.Due to that may be Iran came out from isolation and go on a new path of progress rather than confortation.

2nd Europe views Nabucco as an answer to its move to ease its dependency on Russia for natural gas.
Usman karim based in Lahore Pakistan lmno25@hotmail.com