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Iran to launch gas pipeline construction under Nabucco project

Iran will start work this year to build a pipeline as part of the Western-backed Nabucco project designed to pump gas from the Caspian Sea to Europe bypassing Russia, an Iranian oil official said.

The Nabucco project is intended to pump 20-30 billion cubic meters of natural gas annually from Central Asia, under the Caspian Sea, then through Azerbaijan, Turkey, Bulgaria, Romania, Hungary and Austria. The construction of the Nabucco gas pipeline is expected to begin in 2010 and be completed by 2013. “The study of Iran’s possibilities in this project has almost been concluded. The Iranian gas pipeline will become a part of the Nabucco project, to supply natural gas to Europe from Iran’s largest Southern Pars gas field [in the Persian Gulf],” Deputy Oil Minister Reza Kasai Zadeh said on Monday.

Meanwhile, the board of the Nabucco Gas Pipeline Company decided on May 31 to raise the project’s cost from €5 billion ($7.8 billion) to €7.9 billion ($12 billion) due to growth in oil prices and strong demand for steel for the implementation of large-scale international projects.

Some analysts say that without the support of Turkmenistan, a major natural gas producer in Central Asia, the Nabucco project is unrealistic. Azerbaijan, Iran, Turkmenistan, and more recently Iraq, have been seen as possible suppliers for the project. Iraq’s bid is backed by the United States.

Russia is skeptical over the Nabucco pipeline, saying that in the foreseeable future it will have insufficient gas supplies. In what was widely seen as a major blow to the Nabucco project, Russia, Turkmenistan and Kazakhstan signed a deal in December to supply the Asian states’ Caspian gas via Russia. Moscow also reached deals with Bulgaria and Serbia earlier this year on the South Stream pipeline to pump Central Asian gas to Europe. (