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28 June, 2013 10:00   ▪  

Death of the "Nabucco" pipeline scheme destroys EU’s plan to lower dependence on Russian gas

EU plans to lower dependence on Russian gas in south-eastern member states have suffered a setback with the death of the "Nabucco" pipeline scheme, reports EUobserver

Austrian firm OMV, part of the Nabucco consortium, said on Wednesday (26 June) that Azerbaijan, the gas supplier, has opted for the rival "Tap" pipeline instead, reports EUobserver

"[Azerbaijan's] Shah Deniz II consortium informed OMV, as a shareholder of Nabucco Gas Pipeline International, about the decision on their preferred gas transportation route to Europe. The Nabucco West project was not selected by the consortium," it noted on its website.

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“The European Commission said in the past it does not matter whether Nabucco West or Tap is built because both of them square with its "southern corridor" idea - plans to pump gas directly from the Caspian Sea to Europe, bypassing Russia. But there is a big difference.” notes EUobserver

Tap is to run from the Turkish border via Greece, Albania and the Adriatic Sea, to Italy. Nabucco West was to have run from Turkey via Bulgaria, Romania and Hungary, to Austria. Greece depends on Russian gas for 58 percent of consumption, while Italy's dependence is just 22 percent. Neither country was badly hit in the 2009 Russia-Ukraine gas crisis.

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But in Bulgaria, which depends on Russia 100 percent, street lights went out in Sofia and electricity supplies to hospitals were put at risk. Dependency is also high in Hungary (56%) and Austria (52%).

Both Tap and Nabucco West are less ambitious than the EU's original scheme, "Nabucco Classic," which was to have pumped 31 bcm a year from Azerbaijan, Iran and Turkmenistan to Austria, but which fell by the wayside amid EU sanctions on Iran.

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“There are signs the authoritarian leader is using gas to force political concessions. Aliyev is expected to delay signature of Tap contracts until September or October - the same time as presidential elections,” writes EUobserver

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