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Turkmenistan to Pledge Gas for the Nabucco Project

Turkmenistan is ready to provide the European Union with some 40 billion cubic meters of natural gas annually for the Nabucco gas pipeline project.

“Given the domestic consumption in the west of the country and gas supplies from there to Iran, we will have 40 billion cubic meters of gas annually for export, so that European countries do not have to worry,” Turkmenistan’s Deputy PM Baymurad Khodzhamukhamedov said at the Oil and Gas Turkmenistan-2010 Forum in Ashgabat.

This amount is larger than the projected capacity of 31 billion cubic meters of gas annually which Nabucco is supposed to transfer from the Middle East, the Caucasus, and the Caspian Region through Turkey into Bulgaria and the rest of the European Union.

Nabucco is expected to cost about US$11 billion and come online with about 15 billion cubic meters of gas by the end of 2014, and would have to cross a disputed border between Turkmenistan and Azerbaijan – a conflict which has held up progress on Nabucco for years.

Khodzhamukhamedov pledged there would be an agreement on constructing a trans-Caspian pipeline along the bottom of the sea to transport Turkmen gas across the Caspian to Azerbaijan where it would be fed into pipelines linking up with the Nabucco pipeline.

In his words, a pipeline from gas fields in Eastern Turkmenistan to the Caspian Sea was already under construction.

Turkmenistan is seeking to diversify exports from its traditional market, Russia, and has already boosted supplies to China and Iran.

It could potentially become a major supplier of gas to the European Union-backed Nabucco project to supply the fuel to European markets.

At the same time experts consider that in reality it will be very difficult to bypass Russia and Iran, two actual major gas players of the region.

“Russia and Iran want to undermine the investment case for the Nabucco pipeline and block Turkmenistan from selling gas to it,” ING bank’s energy analyst Igor Kurinnyy said to The Moscow Times.

The race between Nabucco and its rival, Russian-sponsored project South Stream, appears to be tightening after last week Bulgaria and Russia signed a key deal for the construction of the South Stream section on Bulgarian soil.

According to Sofia news agency, Bulgaria, which is a crucial participant in both projects, has lent support for both Nabucco and South Stream.

“Europe is the world’s biggest spender on energy imports. Turkmenistan is ideally placed to catch a piece of the action,” said Wolfgang Peters, head of supplies for Caspian, Central Asia and Russia for RWE Supply & Trading.

“The question about building a pipeline under the sea is very difficult because it is not just economics involved. There is also ecological safety,” said Alexander Medikov, a maritime lawyer for Jurinflot.

“The decision to build a pipeline should be agreed upon by all parts, or else it could end quite badly. Iran, whose Caspian sector borders on the Azeri and Turkmen waters in the south, would suffer greatly from an accident there.”

Turkmenistan has not formally committed yet to any supplies for Nabucco even though its officials have mentioned the 3,300 kilometer-long pipeline as part of the country’s scheme to diversify its markets.

Still, today’s announcement marks a big step forward to the EU backed pipeline.

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