EU eyes Trans-Arab gas for Nabucco.

by Kostis Geropoulos
neurope.eu
12 May 2008

EU Energy Commissioner Andris Piebalgs and External Relations Commissioner Benita Ferrero-Waldner met representatives of the Mashreq countries (Egypt, Jordan, Lebanon and Syria), Iraq and Turkey on May 5 in Brussels to discuss the finalisation of the Trans-Arab gas pipeline, promote its role as a future supplier of the EU backed Nabucco project and encourage the full participation of Iraq in regional energy activities, including as a partner in the Trans-Arab project.

The Trans-Arab pipeline, which currently runs from Egypt through Jordan to Syria, has a capacity of 10 bn cm per year. The pipeline, which will be interconnected with Turkey and Iraq by 2009, will provide a new transport route for gas resources from the Mashreq region to the EU.

Brussels also hopes that, in the future, the pipeline will be connected with the Nabucco pipeline which will traverse Turkey en route to Europe. During the meetings, discussions focused on prospects for reinforcing the existing cooperation through the Euro-Arab Mashreq gas centre in Damascus, which benefits from technical assistance provided by the European Commission.

The centre has been working since 2006 on the development of a regional market for natural gas in the Mashreq, with the objective of its progressive integration with the EU gas market. The centre has also provided support to the ongoing work on the completion of the Trans-Arab pipeline.

The meeting was a follow up to the EU-Middle East-Africa Energy Conference co-hosted by the European Commission and Egypt in November 2007 in Sharm El Sheik. The Euro-Mashreq gas initiative is one of the activities within the Euro-Med energy cooperation that is underway in the framework of the Barcelona Process. The Euro-Med Energy Ministers Conference taking place in Limassol, Cyprus in December 2007 agreed on a priority action plan for 2008- 2013, which outlined harmonisation of regional energy markets as one of the key activities.

The European Commission has finalised a Memorandum of Understanding on Energy Partnership with Egypt and another is under discussion with Iraq. A Joint Declaration on energy cooperation between the Commission and Jordan was signed in October 2007 and is now being implemented.

“The Arab Gas Pipeline is set to be finalised by the end of the year, opening important possibilities as a new transport route for gas to the EU, particularly for the Nabucco project,” Ferrero-Waldner said.

Piebalgs said the Mashreq countries and the European Union are facing similar energy challenges.

“We should seek common solutions to common problems like high oil prices for consumers, climate change or security of supply. A common response is necessary with new pipelines like the Arab gas Pipeline, but also with energy efficiency measures, the spearheading renewable energy in both sides of the Mediterranean,” the EU energy commissioner said.

Piebalgs said that the EU has agreed gas deliveries of seven bn cm annually with Egypt and Iraq. Iraq is to supply around five bn cm of natural gas from 2011 when the Akkas gas field in the western part of the country is producing sufficient amounts. Egypt has also agreed to supply the EU with 2 bn cm of gas when the Trans-Arab gas pipeline is completed in 2009.

The European Commission has strongly supported Nabucco, which is supposed to supply the block with gas from the Caspian Sea region by 2012-2013 while bypassing Russia. After a meeting with Russian Energy Minister Viktor Khristenko, Piebalgs told Russia is working with its own project, South Stream, and excluded the possibility of linking Russia with the Nabucco network.

“We should not ask Russia to join a project which they have never shown interest to join,” he said.

Tatiana Mitrova, who heads of the Centre for International Energy Market Studies at the Russian Academy of Sciences’ Energy Research Institute, is sceptical whether the Trans-Arab pipeline would be a reliable source for Nabucco.

“If you look at the route of Trans- Arab you will understand why there are concerns,” she told, adding that Syria and Iraq are very unstable. “When we are speaking about all these projects Trans-Arabian or even Nabucco where they go trough a number of non-European transit countries you have to understand that it is a very difficult project,” Mitrova said.

But Slovenian Development Minister Ziga Turk, whose country currently holds the EU’s rotating presidency, told in Athens that Nabucco and the Turkey-Greece-Italy gas interconnector (TGI) will be able to secure gas supplies from different sources.
“Behind all these investments there is a business plan. Of those who are building the pipeline, of those who are in possession of gas reserves and of those who are the market for this gas. So I don’t think they are throwing money out the window on this.”