Pipeline politics

22 Feb 2008 By William Echikson

The Nabucco pipeline project is crucial if Europe is to reduce its dependence on Russian gas. But it will never fulfil its potential and may not get started until the EU drops its objection to importing Iranian gas.

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Russia recently signed deals with Hungary and Serbia clearing the way for the construction of its $15bn South Stream gas pipeline to Western Europe. At the signing ceremony, President Vladimir Putin mocked a USbacked plan to build a gas pipeline to Europe that would bypass Russia. "There's always an alternative but it's worse than cooperation with Russia," Putin said.

The US has endorsed the rival $6bn Nabucco pipeline project from central Asia to Austria. Owners of the planned Nabucco pipeline recently chose German utility RWE as the sixth partner. Until RWE joined, the consortium was equally owned by oil and gas companies in the transit countries – Austria's OMV, Hungary's MOL, Turkey's Botas, Bulgaria's Bulgargaz and Romania's Transgaz.

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