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Nabucco is under threat of disruption in favour of South Stream

May 15, 2012, 12:47 UTC+3
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The participants in the Nabucco gas pipeline project, which is a rival for the Russian South Stream gas project, are about to quit this anti-Gazprom undertaking one by one, the Nezavisimaya Gazeta daily reported. Germany’s RWE, the second largest European energy company, stated recently that the company revises its strategic demands over its participation in the Nabucco gas project. In case of a final denial from Nabucco the prospects of the South Stream gas project will improve substantially.

The newspaper recalled that the Nabucco project at a stretch of 4,000 kilometres and with the annual throughput capacity of up to 31 billion cubic metres was to reduce the dependence of European consumers from previous suppliers. Meanwhile, the intentions were not concealed, the EU political and economic circles said openly that Nabucco is mainly seeking to reduce the share of Russian gas supplies. However, up to now no serious progress was made in the implementation of the Nabucco project. The officials criticizing Nabucco noted that the project is too costly: the official costs are made public at 9.7 billion euros, but real costs are estimated at 15 billion euros.

Budapest dealt the first major blow on the project. Back on April 23 in Brussels Hungarian Prime Minister Viktor Orban noted that the largest Hungarian petroleum company MOL withdraws from Nabucco. Orban noted that Nabucco has some difficulties and therefore the Hungarian company quits it.

The experts polled by the Nezavisimaya Gazeta daily are almost confident that Germany’s withdrawal from the project is just a matter of time. Director of the Institute of National Energy Sergei Pravosudov noted that such problems were expected from the very beginning. “Azerbaijan does not make gas supplies, as for Turkmen gas, its supplies are quite problematic without the settlement of the status of the Caspian Sea. It is quite predictable that the German stockholder will quit the project. It is just a matter of time,” he noted.

“The probability that RWE may withdraw from the Nabucco project certainly exists. In this case the initial variant will not be realized,” the co-director of the analytical department of the Investcafe agency Grigory Birg said.

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