Nabucco Deal to Be Signed in Turkey Next Week

A major EU-backed natural-gas pipeline project designed to reduce the bloc’s dependence on Russian energy imports is said to get a big boost next week when leaders of the participating countries meet in Turkey to sign a long-delayed treaty laying the groundwork for the plan.

Nabucco, which will carry natural gas from the Caspian Sea region and the Middle East via Turkey to the heart of Europe, bypassing Russia, beginning in 2014, has emerged as a priority project for the 27-nation European Union.

The intergovernmental accord will be signed in Ankara by representatives of all five countries Nabucco will pass through: Turkey, Bulgaria, Romania, Hungary and Austria. It is seen as a milestone and could unlock billions of euros in financing for the project.

In another sign of the gathering momentum behind the $11 billion Nabucco pipeline, Joschka Fischer, a former German foreign minister, was appointed its chief lobbyist. Gerhard Schroder, the former German chancellor, is on the other side of the equation, heading Nord Stream, the Gazprom-led pipeline to bring Russian gas under the Baltic Sea to northern Germany, bypassing Ukraine.

Europe gets a quarter of its gas from Russia and has been eager to find alternatives, especially in the wake of a spat between Russia and Ukraine in January that led to a cutoff of gas deliveries.

Nabucco, named for a Verdi opera, has been hobbled by uncertainty. The consortium’s six companies have been reluctant to make investments until they know they can secure enough gas to fill the pipeline, while potential suppliers are unwilling to sign long-term gas contracts until they are sure the infrastructure will be built.

Another sticking point: Turkey, a key transit country, had insisted on keeping back some 15% of the pipeline’s capacity for its own use and for re-export.

Nabucco also faces competition from a rival Russian project, known as South Stream, which would run under the Black Sea into Bulgaria. Late last month, Azerbaijan signed a deal with Russia to give it priority in sales of gas from a big new field in the Caspian.


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