Nabucco not economic if Iran not involved

The Nabucco gas pipeline will not be economic if Iran is not involved as it could not be filled to capacity without Iran’s gas, an Iranian official says.

The Head of the National Iranian Gas Export Company (NIGEC) said Monday that the participants in the Nabucco consortium have not been able to resolve their internal problems to arrive at the point of running the pipeline, adding that they are evaluating importing the gas of the Caspian Sea countries, including Iran.

After years of stalling, Turkey, Bulgaria, Romania, Hungary and Austria finally sealed the Nabucco contract on July 13, 2009 as the first step toward building the 3,300-kilometer oil pipeline that is to break Russia’s monopoly on Europe’s gas supply, by transferring Caspian gas to the continent.

As they inked the agreement in the absence of a representative from Iran, Turkish Prime Minister Tayyip Erdogan said Iran should be brought into the project “when conditions allow.”

Despite the fact that Nabucco members have been emphasizing Iran’s presence in the project, the US administration continues its pressure to not involve Iran.

“I don’t think there would ever be an agreement at this point among the Nabucco consortium for Iranian participation at this time,” the US State Department’s Special Envoy for Eurasian Energy, Richard Morningstar, told the Senate Foreign Relations committee on July 16, 2009.

This is while, at a May meeting in Prague, Turkmenistan and two other potential suppliers — Kazakhstan and Uzbekistan — withdrew their support for the pipeline project.

In January, Azerbaijan’s president Ilham Aliyev criticized delays in the Nabucco pipeline construction, saying that the project lacks leadership.

“[Russian energy giant] Gazprom has said it will buy whatever we supply. If Nabucco is delayed, we will sell more to Gazprom, it is clear,” Aliyev said in an interview with the Wall Street Journal.

He also told Bloomberg Television that the Nabucco project lacked the leadership necessary to secure gas supplies, consumers and financing.

“So far we do not know who is that leader who will move this process forward,” Aliyev told Bloomberg Television. “Who will engage itself in negotiations with gas producers, transiters? Who will do the marketing for this gas? What will be the pricing?”

“So a lot of questions that are not answered for quite a lot of time,” Aliyev said.

Nabucco, backed by the European Union as a way to tap Caspian gas and diversify supplies away from Russia, has become “too politicized,” he said in the interview.

The head of NIGEC added that the members of the Nabucco consortium have not entered into the direct negotiations with Iran due to the current political atmosphere.