Middle East Economic Survey

VOL. LII

No 45

9-Nov-2009

CASPIAN

No Role For Iran In Nabucco, Says RWE 

Germany’s RWE on 1 November issued a statement saying that it does not see “any need to fill the gas pipeline Nabucco with gas from Iran.” A spokesman for RWE told MEES that the press release was issued to address continuing reports in the media regarding Iranian participation in the 31 bcm/year Nabucco gas pipeline project. The Tehran Times , citing Iran’s Mehr news agency and Press TV , reported on 1 November that Reza Kasaizadeh, Managing Director of the National Iranian Gas Export Company (NIGEC), said that Iran had begun “unofficial negotiations” with some European countries on supplying gas to the pipeline. “Definitely, the Nabucco pipeline will not become operational in the absence of Iran,” Mr Kasaizadeh was quoted as saying. Turkish officials, including Prime Minister Recep Tayyip Erdogan, continue to state that Iran could participate in the project at some later date. Ankara is negotiating with Iran on developing Phases 22-24 of the South Pars project with the intention of sending that gas overland to Turkey.

“Azerbaijan and Iraq and Turkmenistan are able to offer more than enough gas to fill Nabucco,” Stefan Judisch, CEO of RWE Supply and Trading said in the RWE statement. “We expect to have first supply contracts in the first half of next year. Beyond that, RWE does not view Iran as a further potential partner in the Nabucco consortium. There are no talks or plans in this respect.”

Mr Judisch pointed out that Iran is a net importer of gas – it intends to increase its imports of natural gas from Turkmenistan by 8mn cmd to 33mn cmd this month – and other energy sources. (Iran imports some 110,000 b/d of gasoline to help meet domestic demand – MEES, 12 October). He also said that the political environment does not permit the involvement of Iran in the project.

Nabucco Plans Open Season

The RWE statement provided further clarification on the Nabucco project’s progress. It said the open season for capacity booking by shippers on a binding basis is expected to be commenced in the first half of next year. It added that a final investment decision is expected at the end of 2010 and that currently costs for construction of the 3,300km pipeline are estimated at approximately €8bn. Building is planned to begin in 2011 and first gas is to be transported in 2014. RWE is the most recent member to join the Nabucco consortium. Other members are: OMV (Austria), MOL (Hungary), Transgaz (Romania), Bulgaria Energy Holding (Bulgaria) and Botas (Turkey – MEES, 2 November, 12 October).

© Copyright MEES 2009.