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Three reasons Nabucco might be back on

Progress on the Southern Gas Corridor project, which will take gas from Azerbaijan’s Shah Deniz 2 field in the Caspian Sea to consumers in Europe, will hit another milestone on March 17th when work begins on the 1,850km Trans-Anatolian natural gas pipeline (TANAP). But another transportation option in the region has also been in focus recently – Bulgaria’s Prime Minister Boyko Borisov announced in March that he wants to restart the Nabucco-West pipeline, which lost out to the Trans-Adriatic Pipeline (TAP) in the race to transport Azeri gas to Europe.

Abandoned in 2013 and its construction cancelled, Nabucco seemed consigned to history – but could the pipeline be back on? Here are three reasons why this might be the case.

1. Political will

Some of the strongest support for a Nabucco revival comes from Bulgaria, who lost $600 million per year in potential transit fees and a non-Ukraine gas supply route when South Stream was cancelled last December – Bulgarian energy expert Prof. Atanas Tasev has even claimed that ‘Bulgaria has disappeared from the energy map’ after South Stream’s demise. The country reportedly issued a tender recently to restart offshore construction of part of South Stream even though the project has been mothballed for three months, so desperate is Bulgaria for the pipeline to get back on track. These rumours have been denied by Temenuzhka Petkova, the country’s minister for energy.

While a planned interconnector from Greece would allow it to siphon 3 bcm a year, Bulgaria would prefer the security of supply and transit fees that Nabucco or another major pipeline would bring.

An extra non-Ukrainian gas route also makes sense to the rest of the Nabucco countries, which are dependent on Russian gas. Romania’s own resources are not developed enough to meet its needs, despite large finds in recent years, and Hungarian Prime Minister Viktor Orban has said at a recent cooperation council that he would prefer Russian gas to come to Europe via Turkey.

2. Gas from Turkish Stream will need somewhere to go

South Stream’s cancellation infuriated the proposed transit countries along its route, but its replacement Turkish Stream – a 63 bcm line under the Black Sea from Russia that would surface on the Turkish coast – could fill the supply gap for some of them.

Unlike South Stream (which would have made landfall in Bulgaria, bypassing Turkey altogether), the new Turkish Stream would result in even more gas being parked in western Turkey, in addition to flows from TANAP. While TAP and the rest of the Southern Gas Corridor has been designed to double its carrying capacity if needed without significant extra investment, taking all this new gas would be a challenge.

“There is simply not enough capacity to deliver these volumes (from Turkish Stream) from the Greek-Turkish border into the heart of Southeastern Europe in order to reach the consumers that Gazprom planned to reach with South Stream,” Jack Sharples, associate professor and lecturer in energy politics at the European University in St. Petersburg, told the Moscow Times. Could a revived Nabucco provide this capacity?

3. Additional supply sources?

There are plenty more sources of gas that could fill Nabucco as well as Turkish Stream, especially if Iran finally enters the export market. Iran’s president Hassan Rouhani told the Austrian government last year that his country could supply up to 25 bcm per year to Europe through Turkey with minimal extra investment, and a Trans-Caspian pipeline could also bring Turkmenistan into play. Added to this would be production from Azerbaijan’s other fields such as Absheron (due to come on stream in 2021) and a potential Shah Deniz 3 development. Taking all these gas sources into account means a revived Nabucco would be unlikely to run dry.

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