ELECTIONS STALL NABUCCO PIPELINE PLANS
By Vincent Boland in Ankara, Kerin Hope in Athens, and Peggy Hollinger in Paris

FT
April 6 2007 17:11

Plans to build the â~B¬4.6bn ($6.2bn) Nabucco pipeline to transport
Caspian gas to western Europe have almost ground to a halt after
becoming embroiled in electoral politics in France and Turkey.

Turkey has refused to approve extending the construction project to
include Gaz de France, the French utility. The move, which officials
said might be revised after the French presidential elections in May,
reflects simmering anger in Ankara over France’s support for Armenia’s
claim of genocide by Ottoman Turks during the first world war.

A threatened boycott of French goods in Turkey after the French
parliament voted last year to make denial of the genocide claim a
crime has not had much success. But the Turkish government warned at
the time that it might exclude French companies from contracts. The
face-off with GdF may be a result of that, some diplomats in Ankara
said on Friday.

The 3,300km Nabucco project is designed to bring gas from the Caspian
region to Europe through Turkey, Bulgaria, Romania, Hungary and
Austria. It is backed by the European Union and the US as a way of
reducing Europe’s dependency on Russian gas supplies, but has hit a
series of hurdles that have delayed the start of construction.

The dispute over the participation of GdF, the favourite to join the
consortium building Nabucco, could complicate matters further. Industry
observers said the negotiations with a new investor had taken longer
than expected, with some blaming the strained relations between Ankara
and Paris.

Extracting the project from politics could take some time. Turkey
is holding a general election later this year, and the Armenian
issue has exploded onto the political agenda. But some analysts said
the stand-off between Turkey and GdF could have as much to do with
negotiating tactics as with politics.

Turkey is keen to sell its part of its excess gas supply to western
European buyers, in addition to receiving transit fees for shipping
central Asian and perhaps Middle Eastern gas through Nabucco.

"The Nabucco project is an opportunity for Turkey to unload its
excess supply," a Sofia-based analyst said. "But if talks with a
French buyer aren’t going well, it doesn’t cost anything to bring up
the Armenian issue."

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From: Baghdasarian