Stefan J. Bos, Worthy News Europe Bureau Chief reporting from Budapest
BUDAPEST, HUNGARY (Worthy News) -- Amid a major global financial crisis, Eastern European governments were anxiously awaiting Thursday, January 29, if and when European Union funding will come for the Nabucco pipeline, in hopes of making Europe less dependent on Russian natural gas.
Officials expressed support for the project at an international summit in Budapest this week attended by officials from countries all the way from Brussels to Iraq and from Turkey to Azerbaijan. They were meeting in the shadow of the Russian-Ukrainian gas dispute, which left millions of Europeans short of gas for weeks.
However EU officials admitted that this wasn't the best financial climate to seriously discuss the up to ten billion euro ($13 billion) Nabucco project. But EU Energy Commissioner Andris Piebalgs said the recent gas dispute between Russia and Ukraine, which left around 140 million central Europeans short of gas for weeks, provided a fresh impetus to kick start the project.
It would pipe natural gas 3,300 kilometers directly from the Caspian region through Turkey, Bulgaria, Romania and Hungary to a distribution hub in Austria. Piebalgs acknowledged that Nabucco would in the near future only meet roughly five percent of Europe's natural gas needs.
However the commissioner told Worthy News that Nabucco was part of a strategy to secure energy supplies, without upsetting Russia. "Still Russia will be by far the biggest supplier. Norway will be number two," he said. However, "It is important for the security of supplies, and particularly in the region of Greece, Italy, Bulgaria, Hungary," Piebalgs stressed.
"This part of Europe needs diversification. Theoretically you can diversify with with Norwegian gas, but it is much better to get fresh gas. So Russian supplies will be always necessary but it will not be the only supply that will be coming," he explained.
Yet he made clear that the global credit crunch makes it more difficult for the EU to subsidize the project. Instead, Piebalgs wants the Union to only provide loans and guarantees to a consortium that would include energy companies of several countries.
However Hungary's Prime Minister Ferenc Gyurcsany said there was an urgent need for the EU to help finance Nabucco, with at least 300 million in non-refundable capital. He said it was an issue of "national security and not a commercial project."
Czech Prime Minister Mirek Topolanek, who holds the European Union's rotating presidency, seems to agree that EU action is urgently needed. He suggested that another gas crisis would be more expensive for Europe than the Nabucco project.
"It would be really interesting to see how much the European countries would lose if there is yet another crisis a three weeks gas crisis, which we have actually just experienced," he said. "So let's compare the costs associated with such a crisis and let's actually discount those costs over a period of ten years and than you will actually see that the reality at the end of the day is going to be very different," Topolanek stressed.
While differences remained over how the project should be financed, European officials agreed there was little time left to revive Nabucco. Plans are underway to launch Nabucco by May this year and to pump natural gas by 2015.
However Prime Minister Topolanek warned that Russia's plans to build its own North and South Stream pipelines could threaten the viability of the project. There was some good news for Europeans: President Ilham Aliyev of Azerbaijan told the conference in Budapest that his country, a key potential gas supplier, remains committed to Nabucco.
Yet officials make clear that this commitment alone will not be enough to open Nabucco's gas taps, any time soon.