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New Europe: The ghost pipelines of Nabucco, South Stream

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Aug. 30, 2010, 12:01 a.m. |

Both the West-backed Nabucco (green) and the Russian-back South Stream gas pipelines(red), both bypassing Ukraine as a transit route, look less economically feasible than ever to build, some analysts say.

Kostis Geropoulos writes: The Nabucco consortium has shelved a plan to source gas from Iran to Europe via the EU-backed pipeline, a move that makes the project even less likely. “Frankly, the only way the whole pipeline made sense was if it could eventually plug into the Iranian reserves. By excluding that, which I guess they had to do for political reasons because of the backlash to the Iranian nuclear program, definitely makes the project less viable,” Chris Weafer, chief strategist at Moscow-based UralSib bank, told New Europe by phone on 25 August, two days after the consortium for the multibillion venture announced Nabucco will no longer link to Iran. Nabucco will now include two supply lines at Turkey's borders with Georgia and Iraq. Read the story here.
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Anonymous Aug. 30, 2010, 7:59 a.m.    

Rather shabby story. Nabucco has always been an impossibly expensive idea. Even though, for marketing purposes, they published a ridiculously low price tag, nobody was buying it. Especially NOT private investors that were needed to pull this off. So, on paper, it looked as if South Stream was MORE EXPENSIVE. Even a non-expert looking at the map could tell that South Stream, following an existing underwater route of Blue Stream would have an inexpensive way to go under Black Sea. The deception as to what happens next is not fooling anyone. South Stream could go over Turkey and Greece to Italy. And move northward over Bulgaria and Serbia, Hungary and Austria to --- you guessed, Germany. These are already signed deals. Since Nabucco would have same overland track, the cost were to be about the same. But the ease by which South Stream gets accross Black Sea is the cheap part for South Stream, as opposed to Nabucco's impossible track accross entire Anatolia. Not to mention the meagre supplies from Azerbaijan to make it worthwhile. Now, it has been talked about getting gas from Turkmenistan, via under Caspian Sea segment. And what about the cost of that? Not to mention the warm and fuzzy Turkmenistan's attitude to Nabucco, while building pipelines to China, and selling other supplies to Russia. Hmmm. Iran was never really in the picture, other then a distant dream. Just as Nord Stream was fought, so will South Stream. Ukraine needs to get a piece of this project, just as Italy and France did with South Stream, and Danmark did with Nord Stream. German exports are growing, so is the industry. Changing from oil to gas will increase the demand. LNG is still expensive, and large industries cannot rely on it alone. Modernizing Ukrainian pipeline systems will contribute greatly to European energy security. So will the modernization through Belarus. The investors are currently saying no to Nabucco. Building political pipeliness makes no sense, and increasing the energy infrastructure through Georgia makes no sense at all. The instability of that country is a long term problem, and not a wise way to invest into major infrastructure for as long as there are safer alternatives.

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Anonymous Aug. 30, 2010, 4:40 p.m.    

this rational cool and detached assessment of Nabucco sits well with my own assessment.

the crude reality is that politics and economics doe not mix

they did here for a while, but that is all

thank good

that

the ukraine got rid of the oranges

for if they kept going

it would have been unparralel disaster for the country

this way

absorption of NAFTOGAZ by GAZPROM will do the trick

the ukraine benefits, russia benefits and above all

these two countries people will benefit greatly

under the orange yoke,

who'd benefit

some long distant CIA-OPERATIVES...aka bush and co

all this posturing was no more than posturing

the economic powerhouse, germany

the world collousus, russia

the regional policeman, the ukraine

and the gas baby, iran

have decided

now it is for the others to fall into queue

poland

middle europe

the rest

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Anonymous Aug. 30, 2010, 5:46 p.m.    

guest 7:59 excellent assessment.

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Anonymous Aug. 30, 2010, 5:56 p.m.    

...&quot;Building political pipeliness makes no sense&quot;...If that's the case the entire argument for southstream, as well as bluestream, and even nordstream falls apart... none of these pricey &quot;bypass&quot; routes make any sense from a purely economic standpoint.. the shortest, most easly built and maintained gas routes pass overland through Ukraine and Belarus.

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Anonymous Sept. 1, 2010, 3:49 a.m.    

According to the US NSC, EU will have to rise it's natural gas import from the current 35% to over 45% in the next 10 years, because the EU natural gas deposits in the North Sea are getting depleted.

NABUCCO even if built and fully loaded will supply measly 5% of the EU import needs. What means the EU will need to built at least TWO NABUCCO just to supplement the current Russia gas delivery.

This is why the REAL Europe is very happy with Russia commitment to built and supply the North Stream, which will provide much needed extra industrial supplies where they mater the most - to the ONLY viable producer in the EU, Germany.

Both France and Italy salivate about the South Stream.

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