It seems that it’s not just Central European governments but also energy experts and professionals that are split over the Southern Corridor pipeline debate after a survey published by Limax energy this week showed those interviewed to be at odds over the ongoing Nabucco vs. South Stream Southern Corridor question.
Asked which Southern Corridor pipeline is the most realistic, cost effective and able to meet future gas demand 45% of respondents said Nabucco while a close 36% backed South stream. One thing all interviewed agreed on was the necessity of the project with a whopping 92% of people surveyed believing that the Southern Corridor a transit route which would bring gas to Europe from Central Asia, the Middle East and Russia was necessary to meet security of supply and future demand in upcoming years.
Due to the very high costs associated with both projects and the limited demand they are largely seen as competitors with the possibility of both not viewed as realistically viable.
’’I would just say in the survey both Nabucco and South Stream are seen as equally contributing to security of supply in both regions. For me that was surprising’’, Michael laBelle managing director of Limax energy told the Prague Post.
The survery according to La Belle was designed for the purpose ‘’to gain a better understanding of why/and or if any of these projects will be built’’.
Pros and Cons of Nabucco and South Stream
From a geo-political viewpoint Nabucco is seen as lowering Russia’s leverage as the gas for the project would be non Russian with supplies from Azerbaijan, Iraq, and Turkmenistan and Uzbekistan potentially filling the pipeline. However as highlighted in a piece in the Prague Post back in February despite a renewed emphasis to build the pipeline major questions remain about whether there is adequate supplies to fill the pipeline. http://www.praguepost.com/news/7381-region-wheres-the-gas.html.
The South Stream would carry Russian gas to Europe and have the benefit of bringing diversity of supply routes. By going under the Black sea it would reduce the transit route dominance of countries like Ukraine that have proved problematic in recent years.
At a projected cost of 19-24 billion compared to 7.9 billion for Nabucco, South Stream is seen as more expensive but does carry a higher capacity of 61 bcm while Nabucco could potentially carry 31 bcm.
This year will likely be the decisive year for the fate of Nabucco with much resting on the decision of the Azeri authorizes of what quantities of gas to sell to each pipeline once the new Shah Deniz gas fields come online. A decision from the Azeri authorities is expected sometime from October this year.
Those interested can access the report in full here. http://energyscee.com/wp-content/uploads/2011/04/Southern-Gas-Corridor-Survey-Final.pdf
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