Nabucco Gets Encouraging Signal from Turkmenistan

nCa News and Commentary

Ashgabat, 24 October 2008 (nCa) --- Nabucco, the gas pipeline project that hopes to bypass Russia and reduce European dependence on Gazprom supplies, received Thursday a positive nod from Turkmenistan during a meeting between President Berdymuhamedov and Ms. Maria Reich-Rohrwig (phonetically spelled), Austrian envoy at large for Nabucco.

“Turkmenistan is committed to the policy of multiple routes for energy supplies to the world markets and stands ready to consider any proposals from its business partners,” said Berdymuhamedov.

Mentioning the recent independent audit report of Osman-Yoloton field, certifying the gas reserves in that field between 4 and 14 trillion cubic meters, Berdymuhamedov said, “We have ample opportunities for cooperation.”

He reminded, “Turkmenistan sells its gas at the border,” implying that it is for the buyer to make the transportation and transit arrangements.

The Austrian envoy supported Turkmenistan's proposal for creation of an international system to ensure security of transnational pipelines and energy infrastructures and termed it ‘extremely timely and relevant.’

Wolfgang Ruttenstorfer, general director of Austrian company OMV, the largest oil and gas company of Austria briefed the Turkmen president on Nabucco project. OMV is the project leader for Nabucco.

A large Austrian delegation accompanying the Nabucco envoy and OMV chief is in Ashgabat and it is expected that some practicalities to give Nabucco a forward push would be discussed during the visit.

Austrian non-resident ambassador to Turkmenistan, Ms. Ursula Faringer, was present during the meeting.

Berdymuhamedov is expected to visit Austria in near future.

nCa Commentary

Turkmenistan's support for Nabucco doesn’t indicate any change in the energy policy of Ashgabat.

Diversification of energy export routes is a long-standing commitment of Turkmenistan, embedded in several constitutional and legal documents of the country.

Availability of gas volumes for Turkmenistan's present and future commitments was never in question except by people who relied solely on half-baked news stories, foggy ramblings of armchair pundits and the erratic BP Statistical Review.

Nabucco is a wonderful concept but it has long been obstructed by fossilized political concepts in Europe such as the ‘shoulder-to-shoulder’ blah blah that looks pretty in Washington and Brussels but comes out as an unnecessary irritant in this neighbourhood.

As we have said earlier, instead of touting Nabucco as an attempt to bypass Russia and reduce dependence on Gazprom, it would be better to bill it as a commercially viable concept that has the potential to integrate the Europe and Central Asia economically and improve energy supplies of Europe.

Reduction of dependence on Gazprom supplies is not possible for another decade or so and Nabucco, except for its psychological value, would hardly be a great achievement in bypassing Russia considering that its rates capacity would suffice for no more than 3% of total European consumption.

Geography generates history and history cannot defy geography. Russia is where it is, as is Central Asia – and, Iran.

A recent statement by OMV shows that finally there is recognition that Nabucco may not be able to take off without inclusion of Iran as a supplier and transit country.

The right thing, in fact, the only prudent thing, to do for Europe in its interaction with Central Asia is to detach itself visibly from the US foreign policies.

The formula for the success of Nabucco boils down to only two elements:

1. Don’t irritate Russia unnecessarily

2. Involve Iran