NABUCCO AND SOUTH STREAM WILL COMPETE, SAYS ENERGY ANALYST

Asbarez
/nabucco-and-south-stream-will-compete-says-energy -analyst/
Aug 24, 2009

ISTANBUL (Turkish Daily News)-Turkey’s efforts to become a transit
country between gas suppliers to the east, south and north and
consumers to the west are fraught with danger, energy analyst Necdet
Pamir said in an interview with daily Cumhuriyet.

According to Pamir, the natural-gas pipelines to Europe that are in
the planning stages are competing projects, not complementary ones,
as some officials have suggested.

The two projects are South Stream, which plans to bring gas from Russia
to Europe, and Nabucco, which is expected to initially carry gas from
Azerbaijan and may later expand its supply sources to include Iran,
Qatar, Iraq, Egypt and even Russia.

South Stream’s advantage is the fact that it has a ready supply of
natural gas from Russia, Pamir said, while Nabucco suffers from a
lack of suppliers.

"Nabucco’s initial objective, while not voiced, was to create an
alternative to Russia for the European Union when it came to gas,"
he said. Though Russia is currently being mentioned as a possible
supplier for Nabucco, he added, "this is not the basis of the project."

Pamir said Turkey was squeezed between rival U.S and Russian policies
when it came to energy issues.

Other than Russia, none of the possible Nabucco suppliers could be
counted upon to provide enough gas to fill the pipeline, he said.

Strategic pipelines such as Nabucco and South Stream will require
significant investment, said Pamir. "It is impossible for the two
pipelines to get financial backing. States may be able to invest
part of the money, but once one goes to international investors,
they will ask about the supply issue," he said. "The South Stream
pipeline is in an advantageous position in this regard. If one gets
enough investment, the other will be delayed for 10 to 15 years. In
the end, the other may not even be necessary."

Turkish companies that are in the process of exploiting northern
Iraq’s natural-gas resources should be aware of the dangers, said
Pamir, noting that the disagreement between the central authority in
Baghdad and the autonomous Kurdish administration in the north over
the exploitation of natural resources poses huge risks only some
companies were willing to take.

He said Turkey needs to strengthen the Turkish Petroleum Corporation,
or TPAO, and follow a coherent energy policy in the region rather then
letting private companies take the lead in the sector. "If private
companies are given this duty just to make a profit, one will be left
with neither a successful energy policy nor regional respectability,"
he said.

If a country is economically and politically independent, it should
formulate its policies according to its own interests, the analyst
added, saying it was obvious that the United States would not be
very accommodating of increased cooperation between Turkey and Iran
in the field of natural gas.

Pamir added that both the United States and the EU were concerned
about Turkey’s decision to cooperate with Russia on nuclear power.