Brussels, 18/01/2012 (Agence Europe) - The announcement has rung out like a warning shot for a project which the European Commission struggled to keep going and which is having great difficulty in getting off the ground: German energy group RWE could pull out of the Nabucco project to build a gas pipeline which will carry natural gas from the Caspian Sea region via Turkey to central Europe.
While still keen to import Caspian gas, RWE favours options “that keep our own financial exposure limited”, group Chief Executive Jürgen Grossmann is reported as saying in the Wall Street Journal Deutschland on 17 January. RWE's priority is to secure its gas supply while investing as little as possible as it seeks to reduce its indebtedness, having been badly hit by the German decision no longer to use nuclear power, he said.
These comments are the first indication from a member of the Nabucco consortium, which includes five other energy groups from the countries through which the pipeline is scheduled to pass - OMV of Austria, MOL of Hungary, Bulgargaz of Bulgaria, Transgaz of Romania and Botas of Turkey - that the project could be in jeopardy after years of preparation. They fire out a warning for a project that enjoys strong political support in the EU, in particular from the Commission, which views it as key to diversifying the sources of European gas supply. Russia currently remains the major supplier, providing 25% of Europe's gas.
Nabucco is, however, a controversial project which has come in for severe criticism from numerous experts on the grounds of its commercial viability, given its huge capacity compared with the gas available in the Caspian region, and its excessively high cost of over €8 billion. It also faces competition from the South Stream project, led by Russian gas producer Gazprom and ENI of Italy, with other European partners such as the German BASF and French EDF.
A spokesperson for Energy Commissioner Günther Oettinger refused to comment on the RWE chief executive's remarks. She was reported by Dow Jones as saying that the EU would meet its energy goals with Nabucco or other pipelines on two conditions: firstly, that the pipeline can be expanded and secondly, that there is a certain legal framework which provides stability, certainty and clarity.
The signing in June 2011 of agreements of support for the Nabucco project between the transit countries and the energy companies taking part finalised its legal framework and further cleared the way for construction of the pipeline to begin. Nabucco will run from Turkey to Austria, transporting gas from the Caspian, Central Asia and Iraq to the EU from 2017. (EH/transl.rt)