Nabucco Agreement May Provide Entry Point for Iran

ANKARA (Today’s Zaman)–A long anticipated agreement on the Nabucco gas pipeline project signed last week by the prime ministers of Turkey, Austria, Bulgaria, Hungary and Romania includes provisions that may open the way for Iranian involvement in the project, despite US disapproval.   

Ankara welcomed regional and international supporters on July 13 to the signing of an intergovernmental agreement on the $10.3 billion Nabucco gas pipeline, which seeks to free Europe of its heavy reliance on Russia.

Although initially deemed an integral part of the Nabucco pipeline project that aims to transport Caspian and Middle Eastern natural gas to European markets through Turkey, Iran was left out of the signing ceremony in Ankara.  

Energy pundits say that Iran was advertently kept off the list of the invited nations due to its deep clashes and adversity with the US, especially over its uranium enrichment program, and having US support for the project was vital to make it an effective alternative to Russia’s pipelines.

However, some Nabucco officials claim that the agreement signed by the prime ministers of Turkey, Austria, Bulgaria, Hungary and Romania last week in a glamorous ceremony still included Iran, hidden in some articles. Iran’s exclusion had caught international energy market analysts by surprise since without the vast resources of Iran, Nabucco’s target quantities would be extremely difficult to achieve.

Speaking to Today’s Zaman on the condition of anonymity, Nabucco officials said the final decision on Iran will be shaped by international developments.

Section Eight of Article 2 of the agreement defines the Initial Entry Points as “the starting points of the Nabucco Project at any three points on the eastern or southern land borders of the Republic of Turkey as selected by Nabucco International Company, and, subject to agreement by the Nabucco Committee in consultation with Nabucco International Company, any other point at the eastern or southern Turkish border. The exact location of the Initial Entry Points at the respective borders is subject to the standard permitting and related authorization procedures.”

This article, officials say, points to Iran in its mention of three, plus one optional, entry points but avoids naming them. A Nabucco official said this sentence was intentionally devised to allow Iran to enter the project later on, but it used the expression of “entry point” instead of “supplier country” to dodge alluding to Iran’s potential inclusion.

The 3,300-kilometer gas pipeline project will have a potential capacity of 31 billion cubic meters of gas annually starting from 2015 and is expected to cost $11 billion.

Although it has been officially invited to be a supplier for the pipeline several times, Russia has clearly rejected joining the project and instead has accelerated the construction of a new alternative route to transport its resources to Europe. Russia has also explored striking gas purchase deals with several potential Nabucco suppliers around the Caspian Sea. Iraq, Azerbaijan, Turkmenistan, Egypt and Syria are so far the only countries that have pledged to pump gas to Europe via Nabucco.

The state-owned Turkish Pipeline Corporation (BOTAS) currently has pipelines for gas from Iran and Azerbaijan but must construct new pipelines to access the resources of Iraq and Egypt.

Russia has the world’s largest natural gas reserves, with 47.65 trillion cubic meters of proven reserves. Iran comes second with 28.13 trillion cubic meters of gas beneath its soil, and then come Qatar and Saudi Arabia, with 25.36 trillion cubic meters and 7.7 trillion cubic meters of reserves, respectively.

The idea that Nabucco is destined to arrive stillborn without the inclusion of major gas providers like Iran has been backed by the statements of Nabucco officials and of partner countries. None of them have publicly ruled out Iran as a gas supplier to the pipeline so far; in fact, there have been numerous remarks claiming the contrary.

In an interview with Today’s Zaman last week, after the agreement was signed, Reinhard Mitschek, the managing director of Nabucco Gas Pipeline International, said that Nabucco would not exclude any potential source and will be open for the transportation of any gas meeting quality requirements from every potential gas supplier, including Iran and Russia.

“Nabucco has never, ever excluded any source. Bottom line, we have to buy the gas. The national gas companies will evaluate the political aspect, the commercial aspect, the technical aspect and then they will decide to buy gas from Azerbaijan, Turkmenistan, Iraq, Iran and Russia,” said Mitschek.

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