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BAKU - The European Commission that is lobbying for the construction of the Nabucco gas pipeline has worked out a plan to link Turkmenistan to the conduit without settling the Caspian Sea shelf delimitation issue, Russian Kommersant daily reported.

The EU plan would allow building a gas pipeline to link Turkmenistan to Europe bypassing Russia.

Kommersant reported that Russian government was unhappy with the EU plan to build a pipeline without Moscow’s consent.

The unnamed official in the Russian government called the EU plan as "absurd", promising strong opposition to it.

The EU regulator’s energy unit drafted a document that the parties could use as the basis for a deal on building at least one pipeline across the Caspian Sea, according to a copy of the non-binding paper obtained by Bloomberg.

The European Union is seeking an agreement on a natural-gas pipeline between Turkmenistan and Azerbaijan as the 27-nation bloc aims to import Caspian fuel and reduce its dependence on Russia.

Marlene Holzner, a spokeswoman for the European Commission’s Directorate-General for Energy, has told Kommersant that Turkmen and Azerbaijani government experts held talks under the EU auspices in Brussels in June during which outstanding issues pertaining to border delimitation between the two countries and trans-Caspian pipeline construction "could have been discussed". Holzner neither confirmed nor dismissed the reports saying the EU had drafted proposals seeking to resolve the Baku-Ashgabat dispute.

EU Energy Commissioner Guenther Oettinger said in a recent interview with Kommersant that Nabucco is the priority project for the EU to transport gas from Central Asia. Addressing an international energy forum in Odessa, Ukraine, Oettinger said that to materialize Nabucco, "we may need extraordinary measures to achieve success, such as the Caspian Development Corporation or the building of a trans-Caspian pipeline link," according to a copy of a July 27 speech the regulator posted on its website.

The EU-backed Nabucco, a rival to Russia’s South Stream project, still lacks substantial resources. Initially, Iranian gas was to fill the conduit, but due to sanctions imposed on Tehran by the UN, U.S. and EU, its supplies to European markets appear unfeasible at this point. Nabucco Gas Pipeline International GmbH, the project operator, has told Kommersant that providing the resource base for the project could be Iraq (8-10 billion cubic meters a year) and Egypt (about 1 billion cubic meters). However, these sources do not allow to fill the pipeline and make it economically viable. Therefore, more realistically, the needed resources could be supplied by Turkmenistan and Azerbaijan, though no relevant agreements with Baku and Ashgabat have been reached to date.

Moreover, if Azerbaijani gas could be transported to Turkey and further pumped into Nabucco through the existing Baku-Tbilisi-Erzurum pipeline, there would be no pipe available for Turkmenistan’s joining the project. An option to solve this problem could be constructing a 1,900 km gas pipeline along the Caspian seabed from Turkmenistan to Azerbaijan, with annual capacity of 20-30bn cubic meters. This project, which allows to export energy resources from Central Asia bypassing Russia, has been backed both by the United States and the EU since the late 1990s. Besides, in 2007 the US State Department allocated a grant to develop a feasibility study of the project.

US Deputy Assistant Secretary of State George Krol, who is in charge of US relations with Central Asian states, has recently confirmed Washington’s interest in the trans-Caspian gas project. US Special Envoy for Eurasian Energy, Richard Morningstar, echoed the statement Tuesday, saying that Ashgabat will supply gas for a major pipeline to Europe.

Head of East European Gas Analysis, Mikhail Korchemkin, says the project could be of utmost interest for Turkmenistan. "The trans-Caspian gas pipeline and Nabucco are the shortest and cheapest route for Turkmen gas to reach Europe."

Tensions between Azerbaijan and Turkmenistan have long been the core obstacle for building the trans-Caspian conduit. The two countries face differences over the offshore Kapaz field (referred to Serdar in Turkmenistan), which holds estimated reserves of 100-150 million tons of oil. In 2008 Presidents Ilham Aliyev and Gurbanguly Berdymukhamedov launched talks on Kapaz and a possible delimitation of the shared maritime border, but so far the discussions have been fruitless. Apparently, Brussels has decided to act as a mediator to solve the dispute.

A reliable source at the Russian Foreign Ministry confirmed Wednesday that the EU is trying to reach a solution to the long-standing disagreement between Baku and Ashgabat, aiming to launch construction of the trans-Caspian pipeline as soon as possible. Earlier, the U.S. attempted to broker an agreement but did not succeed, the source told Kommersant.

So far, the European initiative has not brought any tangible results either. Azerbaijan attended an EU-hosted meeting in Brussels with Turkmenistan and no agreements were signed, said Vagif Aliyev, head of investment at Azerbaijan’s state oil company SOCAR, Bloomberg reported. Azerbaijan has yet to receive a concrete proposal from Turkmenistan, holder of the world’s fourth-largest gas reserves, Aliyev said by phone from Baku. "We are ready to provide transit for Turkmen gas," he said.

"We think that defining the borders is not the main problem blocking such a project," Vagif Aliyev said. The main issue is coming up with a commercial project that will be profitable to investors, he said. "We, as investors, are not ready at this moment."

The EU must get "serious" about Nabucco to compete with Russia’s giant Gazprom for Caspian natural gas, Azerbaijani President Ilham Aliyev said in January. Nabucco lacks a clear leader able to attract the necessary financing or hold talks with suppliers and transit countries, Aliyev said.

Moscow, on its end, is resolute on countering the trans-Caspian project, which will create a rival for Gazprom in the European gas supply market. The Foreign Ministry source said the main hurdle impeding the project is the lack of a precise legal status of the Caspian and principles defining its division, an issue that has divided the coastal nations since the Soviet collapse.

"Without Russia these issues can’t be resolved, therefore, there will be no [such] pipe," the source said.

The Russian government confirmed Wednesday that "the absurdity of this formulation is that Russia will not provide its consent for laying a trans-Caspian (pipeline) without delimitation of the border."

The Nabucco pipeline project aims to decrease the EU's dependence on Russian imports by bringing Caspian gas to a hub in Austria via the Balkans.

The gas would be shipped to Europe via Turkey, Bulgaria, Romania and Hungary. Construction of Nabucco will begin in 2011, as the recent gas crisis between Russia and Ukraine has convinced decision-makers of the need to speed up the project.