Head of US-backed gas pipeline project says route can co-exist with Russian rival
Mar 19 2008, 10:49

ANKARA, Turkey (AP) - The head of a planned U.S-backed pipeline across Europe from Turkey said Tuesday there was enough future demand for gas for the project to co-exist successfully with a rival Russian-backed scheme.

Large gas reserves in the Caspian and Middle East regions - including Iran - and the expected increase in European demand is enough to justify both projects, Reinhard Mitschek, the managing director of the Vienna-headquartered Nabucco Gas Pipeline International GmbH, told The Associated Press at a gas conference in Ankara, Turkey.

The Nabucco pipeline, slated for construction in 2010 and to start operations three years later, will bypass Russia and is at least in part intended to help ease western Europe's dependence on Russian supplies. The project is viewed as a competitor to the South Stream pipeline backed by Russia, but Mitschek said that was only partly true.

"To a certain extent they are competitors, to a certain extent they are complementary for Europe," said Mitschek.

Within the next decade, Europe will need to import an additional 150 billion cubic meters (5,300 billion cubic feet) of gas per year, he said.

The Nabucco and Russian-backed South Stream pipelines would each only be able to deliver about 30 billion cubic meters (1,060 billion cubic feet) when operating at full capacity, he added.

"I don't have to convince politicians. But I have to convince the market players on the sense of Nabucco and the added value to the market," Mitschek said.

Mitschek said Nabucco could transport gas from potential suppliers including Azerbaijan, Turkmenistan and Iran if there is enough demand.

The Nabucco pipeline, which is backed by both the United States and the European Union, would stretch from Turkey to Austria through Bulgaria, Romania and Hungary, bypassing Russia.

Huseyin Saltuk Duzyol, head of Turkey's state-owned gas company Botas which is a shareholder in Nabucco, said gas supplies would determine whether the two projects can both be built and remain profitable. Caspian production from countries such as Turkmenistan, Azerbaijan and Kazakhstan would likely not support both.

"If South Stream sees Caspian gas as its main source, then these two projects are definitely rivals," making it harder for them to co-exist, Duzyol said.

But Nabucco might get additional gas as Turkey turns to Iran as a potential supplier. In an apparent effort to secure enough gas for Nabucco as well as its domestic needs, Turkey reached a preliminary agreement with Iran last summer to build some 3,500 kilometers (2,174 miles) of pipelines and transport up to 40 billion cubic meters of Iranian and Turkmen gas per year to Turkey.

That move has angered US officials who have been among Nabucco's strongest supporters and backed Turkey's ambitions to be an energy hub between vast resources to its east and energy hungry European markets to its west. The Turkey-Iran deal is not final but was met with US warnings against energy cooperation with the Islamic Republic.

Mitschek said the market would decide.

"If a company in Europe wants to buy Iranian gas, we will transport it," Mitschek said.

Nabucco is a joint project among Austria's OMV Gas International GmbH, Hungary's MOL PLC, Romania's Transgaz SA, Bulgaria's Bulgargaz Holding EAD, Turkey's Botas AS and Germany's RWE AG.

The pipeline would run for 3,300 kilometers (2,050 miles) from Turkey to Austria. It would cost around $7.5 billion as opposed to Russia's $10 billion South Stream.

The Russian gas monopoly Gazprom's South Stream pipeline would run under the Black Sea from Russia to Bulgaria before extending to Western Europe. Russia has also signed agreements with Serbia and Hungary to build pipelines in those countries as part of the same scheme.

Europe imports more than half of its natural gas need and relies on Russia for most of its imports. It faces being even more dependent on Russian gas as the domestic need increases and the indigenous production is expected to fall.

Hundreds in Prague protest proposed US missile defense installation, demand referendum
Mar 17 2008, 12:39

PRAGUE, Czech Republic (AP) - Several hundred demonstrators gathered outside Prague Castle Saturday to protest plans by Washington to place parts of a missile defense system on Czech soil and demand a referendum on the issue.

The US is in talks with the Czech government to locate a missile tracking radar system at a base in a military area near Prague. Washington also wants to place 10 interceptor missiles in Poland as part of a missile defense shield that US officials say is necessary to protect against possible future attacks from Iran.

US President George W. Bush and Czech Prime Minister Mirek Topolanek said in Washington last month that the two countries were close to an agreement.

While the Czech government has been receptive to the proposal, most Czechs oppose it, according to recent polls. The government opposes holding a referendum, and says it will seek parliament's approval once it has settled on a deal with the US

"Most of the public don't agree with the radar," said Jan Majicek, an organizer of the rally outside Prague Castle, the seat of the Czech presidency. News "The people want a referendum as the only means to decide about the radar," he said.

The protesters planned to march through the city to the US Embassy in Prague.

Russia opposes the US plan to build part of its global missile defense system so close to Russian borders, arguing that it would undermine the Russian deterrent and could trigger a new arms race.