Nabucco transit countries adopt joint declaration
By Aynur Jafarova
The governments of Austria, Hungary, Romania, Bulgaria and Turkey have adopted a joint declaration stressing the potential of the Nabucco gas pipeline to supply the energy markets of the Western Balkans and the Visegrad group countries (Poland, Slovakia, the Czech Republic and Hungary), the Nabucco Gas Pipeline International consortium said on May 21.
The declaration was passed at the fifth Nabucco Committee meeting convened in Bucharest. The meeting was hosted by the Romanian government.
The governments of the five countries further expressed their commitment to engage in developing the necessary gas interconnections to ensure that Nabucco can also supply the countries in the Southern and Central-North dimension of Europe.
The State Parties call on the European Council which will meet on May 22 to address the completion of the Internal Energy Market to note the wider potential of Nabucco to provide access to new sources of gas for promoting growth and competition at the European level. They also approached the European Commission to continue to provide the project with the necessary regulatory and technical assistance.
The participants at the Committee Meeting also welcomed the progress of the project since the previous meeting held in Budapest in April, and the work done by the authorities in the transit countries to ensure the successful implementation of the project.
In particular, they highlighted the efforts of the Nabucco Tax Subcommittee to align taxation issues under the Nabucco Intergovernmental Agreement and its detailed recommendation regarding the application of the tax provisions under the agreement.
States Parties now have an expert basis from within the Nabucco Committee to complete the necessary tax instruments or agreements under their domestic legal order.
CFO of Nabucco Gas Pipeline International GmbH Frank Siebert said that the investors need predictability and stability when it comes to cash flow for a project.
"We have now achieved this basis thanks to the recommendations of the Nabucco Tax Subcommittee," he added.
The declaration also highlights the complementary of the Nabucco and the Trans Anatolian Pipeline (TANAP) projects and welcomed the progress made in the implementation of the TANAP project by the Turkish and Azerbaijani authorities. Delegations from both countries were also present at the meeting.
Nabucco recently concluded a Memorandum of Understanding with TANAP to ensure effective cooperation in the implementation of both projects.
According to Nabucco Gas Pipeline International CEO Reinhard Mitschek, the project has reached several milestones since the Budapest Nabucco committee meeting.
"Bulgaria became the second country to grant Nabucco the environmental permit to construct. We launched the registration phase of the Open Season to levels of interest that surpassed expectations. The national regulators also granted Nabucco a prolongation of the exemption from EU legislation on Third Party Access, in alignment with the delivery timelines of Shah Deniz gas," Mitschek said.
He also stressed that Nabucco is the shortest route to the markets of South Eastern Europe and remains the best option to open the Southern Gas Corridor.
The consortium developing Azerbaijan's giant Shah Deniz field in the Caspian Sea is considering both TAP and Nabucco West for gas export. The consortium will make its final decision on the pipeline route in June and a final investment decision by October 2013.
The Trans Adriatic Pipeline (TAP) project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into Western Europe. TAP's initial capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters.
Nabucco West, a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria, and TAP are part of the Southern Gas Corridor, which is one of the EU's priority energy projects. The Southern Gas Corridor aims at diversifying the routes and sources of energy supply, thereby increasing secure delivery.
The gas which will be produced within the second stage of Shah Deniz field development is considered as the main source for the Nabucco West and TAP projects.
The Shah Deniz field, which is one of the world's largest gas-condensate fields, was discovered in 1999. Its reserves are estimated at 1.2 trillion cubic meters of gas.
Overall, the Shah Deniz field has proved to be a secure and reliable supplier of gas to Azerbaijan, Georgia and Turkey as well as Europe.