Gas supply via Nabucco depends on EU efforts to draw investments: international experts

?Nabucco summit held in Hungary was a very important step towards setting up a concrete plan in relation to the construction of the Nabucco pipeline,? expert at Oxford University on energy studies Shamil Yenikeyeff told Trend Capital via e-mail. Summit on prospects of construction of the Nabucco gas pipeline was held in Budapest earlier this week. Representatives of the Nabucco participant countries, potential suppliers, transit countries and European financial institutions attended the summit. The summit aimed to seek new sources of financing for the project. Heads of the European Investment Bank and EBRD announced they are ready to render financial support to the project if intergovernmental agreement is in place. Yenikeyeff said We have seen that the EU is ready to offer concrete proposals on vital investments and transit fees for supply of gas via Nabucco. However, it is still unclear when and where theinvestment will come from. Central Asian/Caspian producers also will not commit their gas volumes to European markets unless they see a real action from the EU in terms of investment and a step-by-step plan on the implementation of clear energy strategy in relation to the Nabucco pipeline, he added. Director of the Energy Department at Italia?s Bruno Leoni University Carlo Stagnaro believes that it was a very important summit as it shows that the involved parties are still willing to advance the Nabucco project despite the economic crisis and the (most likely temporary) fall in gas demand in Europe. According to forecast of Italian Edison, European gas demand will increase 15 percent and reach 648 billion cubic meters per year by 2014. Gas demand in 27 European countries and Norway, Switzerland and Turkey will reach 720 billion cubic meters peer year by 2020. Stagnaro said there are several reasons for strong interest for Nabucco pipeline. ?I believe there are a number of reasons ? ranging to energy security issues to the need to create alternative sources for Europe to meet its gas demand, and for the Caspian region to sustain its gas supply,? Stagnaro said to Trend Capital via e-mail. The recent supply disruption caused by conflict between Russia and Ukraine prompted many countries to promote their favorite gas pipeline project one of which is Nabucco project, the U.S. Energy Security Analysis Company?s Expert Andrew Reed said. ?The Nabucco summit and the response of Nabucco supporters following the gas dispute [Ukraine and Russia] have been to re-affirm support for Nabucco? Reed told Trend Capital via e-mail. Besides Azerbaijan, the project needs the participation of some other supplier, ideally Turkmenistan, Reed said. Reed said that Turkmenistan is a cautious actor and joining a project to sell its gas to Europe bypassing Russia will require a bold re-orientation of foreign policy ?So the West must demonstrate sustained support if it is to attract Turkmenistan to the project,? Reed said. One alternative supplier is Iran, Reed said: ?But even if the problem of sanctions is overcome, it consumes as much gas as it produces, so its export potential is limited.? According to BP?s data as of Jan. 1 in 2008, Azerbaijan?s proved gas reserves totaled 1.28 trillion cubic meters, Turkmenistan?s ? 2.67 trillion cubic meters and Iran?s ? 27.8 trillion cubic meters, Kazinform refers to Trend News. Yenikeyeff said that Iran is an important source for Nabucco gas pipeline, as there several issues which could be a problem for gas suplies from Central Asia (Turkmenistan, Kazakhstan). One of them is that Russia and Iran are unlikely to let the Trans-Caspian pipeline, which can be laid via Caspian seabed and connected through Azerbaijan and Georgia to Nabucco, run across the Caspian Sea for "environmental reasons". The Nabucco project worth 7.9 billion euro will deliver Azerbaijani and Central Asian gas to the EU by 2013. Construction of the pipeline is expected to begin in 2010. Its maximum capacity will be 31 billion cubic meters per year. Nabucco shareholders are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE with 16.7 percent each.