Kazakhstan has good prospects for European market development - Hungarian Ambassador-at-Large for Nabucco Mihály Bayer
ASTANA. January 14. KAZINFORM /Rassul Bakhamov/ The most important problem for the importing countries and countries exporting energy feedstock is the problem of transportation. So this issue is topical for Kazakhstan that builds up its multi-vector policy both in political and economic directions. About problems of energy feedstock transportation to Europe a Kazinform correspondent talked to Ambassador-at-Large of the Hungarian Government for the Nabucco project Mihaly Bayer.
As is known, Kazakhstan exports oil and natural gas to its nearest neighbors. How important is the Nabucco project for Kazakhstan?
Today, despite the world financial crisis, according to the estimates of different experts, natural gas consumption in the EU countries is expected to increase. At the same time, Hungary and other European states face a strategic task of diversification of energy feedstock supplies routes. It should be noted that presently 83 percent of Hungary's demand for gas is satisfied through the supplies of raw products from Russia. But all of us remember the last winter, when the Ukrainian-Russian crisis caused interruptions in the supplies to the EU countries. Besides, the alternative import of raw materials will seriously affect prices for gas. I think that the participation in the project is attractive for Kazakhstan in terms of obtaining sustainable and reliable sales market likable due to its price for natural gas.
What stage of the project is realized presently?
Speaking about the Nabucco project specialists emphasize three main issues: 1) who renders political support? 2) where the needed volumes of gas can be taken from? and 3) who will finance the project? The answer for the first question was reflected during the 2009 Summit in Hungary and in the final Budapest Declaration. It was signed by the EU member states, representatives of the EBRD and other participants.
We are glad to know that the Kazakh delegation took part in the summit since it demonstrates interest of Astana in the project. We received Azerbaijan's confirmation on supply of about 7-8 bln cubic meters of gas to Nabucco after the development of the second stage of Shakh Deniz oilfield. The Azerbaijani President stated that his country was ready to supply about 10 bln cubic meters of gas. The Iraqi authorities announced they were ready to supply about 15 bln cubic meters of gas as well. Egypt is interested in gas supplies as well.
As for the financing of that commercial project, there was established 'Nabucco' Project Company consisting of six commercial companies from Austria, Germany, Bulgaria, Hungary, Romania and Turkey.
To what extent the political factors can influence the performance and financing of the project? As is known, Nabucco has competing projects "South Stream" and "Blue Stream II"...
On the issues of competition neither Hungary nor the European Union, interested in routes diversification, is opposed to the alternative projects. For instance, "South Stream" can supply gas to Hungary. But the negative experience of January 2009 shows that it is necessary to have different sources of energy supplies.
To be honest, Nabucco is the most prepared project in comparison with South Stream and Blue Stream II. The political issues have been already settled. A long-term legal agreement fixing the terms of piping work and gas supplies was signed at the governmental level in 2009. Pricing conditions were determined.
Regarding the issue of competition with other projects it is worth to be mentioned that according to the estimates of German experts, gas supply to Europe through Nabucco will be the cheapest route.
What issues are you planning to discuss with the Kazakh partners?
It is the time of dialogue with Kazakhstan on prospects of its participation in Nabucco, cooperation opportunities and advantages that Kazakhstan may get. We know that Kazakhstan adjusted its approaches and the volumes of natural gas production will be increased in the future. We should take into account the fact that Nabucco would not be laid through the territory of Georgia and Azerbaijan. The pipeline ends near the borders of Turkey and Georgia. There is an opportunity to use the South Caucasian Pipeline further, the flow efficiency of which can be increased. If Kazakhstan and Turkmenistan are ready to supply gas to Nabucco pipeline it will be possible and technically not difficult to construct a pipeline through the Caspian Sea.
Thank you for the interview.
Kazinform Note: The Nabucco pipeline is a planned natural gas pipeline (Turkey-Bulgaria-Romania-Hungary-Austria). The construction of the pipeline is expected to start at the end of 2010 and accomplish in 2013. In the beginning the deliveries are expected to be about 8 bln cubic meters of gas. Azerbaijan, Iran, Turkmenistan and Iraq are planned to be potential suppliers.