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Dialogue of the deaf on the Nabucco project

Int’l Relations

The problems in the commercial aspect of the Nabucco natural gas pipeline project, linking the Caspian basin with Europe remains unsolved. The EU expects Turkey to change its stance on the pricing mechanism whereas Ankara wants the European side to come with alternative proposals Turkey and the EU blame each other for the lack of progress in overcoming problems that have surfaced about the realization of the Nabucco natural gas pipeline project, linking the Caspian basin with Europe.

The problems in the commercial aspect of the project, which aims at delivering 30 billion cubic meters of gas through a 3,300-kilometer pipeline linking Turkey, Bulgaria, Romania, Hungary and Austria, remain unsolved.  Turkey’s stance on the pricing mechanism has met with objection from the EU as well as Azerbaijan, which will be the main supplier for the $5.8 billion project. The EU expects Turkey to change its stance, whereas the Turkish government is still expecting the Union to come up with alternative proposals. “The bureaucracy on both sides seems to be moving slowly,” said a Turkish official. But time is running out as the construction of alternative pipelines from Russia to Europe, might jeopardize the realization of the project.

 
“PRIVILIGED OWNERSHIP”
With the argument that it wants to secure its own energy supply, the Turkish government seeks “privileged ownership” over a certain amount of gas that will go through the pipeline. It is negotiating with the Azerbaijani government to buy the gas at a better price and wants to have the right to use this amount for domestic consumption or to resell it. This stance is perceived by Turkey’s interlocutors as an effort to gain an extra premium, instead of simply asking for a standard fee at internationally commercial prices, according to international energy experts. However Turkey’s position poses a key challenge for the Nabucco consortium that is subject to EU competition rules which require pipeline operators to grant open access to facilities at regulated prices. With the exception of Turkey’s pipeline company, BOTAŞ, all the other partners in the consortium are EU companies, with MOL (Hungary), Bulgargaz (Bulgaria), Transgaz (Romania), RWE (Germany) and OMV (Austria), that is also a shareholder in the Turkish company Petrol Ofisi, which belongs to the Istanbul-based Doğan group.

Turkish Energy Minister Hilmi Güler said recently that they have cleared the problems and invited the EU’s coordinator for Nabucco, Jozias van Aartsen, to Turkey. “We have seen this statement in the press however neither us, nor Aartsen has received an invitation from Ankara,” said an official from the European Commission. “We did not get any indication so far that Turkey has changed its stance on the pricing mechanism,” said the same official who asked to remain anonymous. The Turkish side has a different version of the current state of affairs. “We are actually waiting for the EU to come with alternatives,” said a Turkish official. “We have told the EU side that we need access to secure energy supplies too. It would be rather unthinkable that there is a pipeline passing from our soil but we cannot make use of it,” he added. The EU understands Turkey’s concerns, according to Turkish sources. “The Europeans told us that there are other ways to alleviate these concerns. But they have not so far told us how. We are still waiting for them,” said a Turkish diplomat. Aartsen is expected to prepare a report for the Commission by June.

The intergovernmental conference to prepare the legal groundwork was scheduled to start by summer and there are plans to have the intergovernmental treaty ready for signing in September. But diplomatic sources familiar with the issue have doubts on whether it will be possible to keep track with this schedule. “On the intergovernmental level, things are going slow. But we also know, that there are intensive talks between the firms in the consortium. They might be working on finding a formula,” said a European diplomat. (Turkish Daily News)

 

 

 

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