Washington briefing: European Union promises funding for Russia gas bypass

by Emil Sanamyan

Published: Thursday January 29, 2009

Washington - The European Commission has proposed $330 million in initial funding for what is known as the Nabucco gas pipeline. The proposal unveiled at a European Union (EU) conference held in Hungary on January 28 would need member-states' approval to go ahead. It comes shortly after the Russian-Ukrainian spat over gas supplies that left several Balkan countries without heating earlier this month.

In theory, the Nabucco pipeline would bring natural gas from Central Asia to Turkey and then on to Europe, substantially eroding Russia's current dominance in Europe's natural gas market. (The pipeline's unusual name is short for Nebuchadnezzar, the Babylonian king who according to the Old Testament freed the Jews and rebuilt their temple; there is also an opera of the same name.)

The pipeline, with an estimated price tag of more than $10 billion, has been slow to take off since it is still unclear where the gas would come from.

The United States and some of its European allies legally restrict energy cooperation with Iran, which is the second-largest gas producer after Russia and is the only real alternative.

Turkmenistan and Azerbaijan, which have signed off as the only suppliers so far, are unlikely to be able to supply the needed 30 billion cubic meters of gas a year; Iraq and Egypt have also been courted as potential suppliers.

At the same time, Germany and Turkey and others are supporting the North and South stream pipelines that would bring Russian gas to them via the Baltic and Black Seas, respectively.

Officials seeking to reduce Europe's reliance on Russia have called the twin pipelines a "direct threat to Nabucco project," according to RFE/RL.

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