Nabucco: From Verdi Opera to Soap Opera
South Stream: The Evolution of a Pipeline in Budapest, Hungary was an event about the prospects for building the South Stream natural gas pipeline, but Hungarian State Secretary for Energy Affairs, Pál Kovács, recalled a melody waning in the background: Nabucco.
In June 2013, he recalled, the Shah Deniz consortium chose the Trans Adriatic Pipeline (TAP) over the Nabucco West pipeline for numerous reasons.
Of Nabucco, Minister Kovacs commented: “First of all, the international company didn't do everything it could have toward the success of this project. Let us just consider that 10 years was not enough for them to put together a realistic and competitive concept; in that time they just tired everyone out, collected top fees and salaries, but in 10 years we saw things clearly.
“Children grow up in 10 years, so it's too long a time for making a project successful.”
He noted that TAP had achieved its objective in 1 year, and recalled the “SEEP” project, which would have relied upon existing infrastructure, adding bits and pieces when necessary from the Bulgarian-Turkish border to the Austrian hub.
“Calculations indicated that compared to the costs for Nabucco, a 10-15% cheaper offer could have been made, had the will been there and had they not insisted on constructing new pipelines everywhere,” he stated.
While EU support was apparent in the beginning, he said that the Commission had become very reserved in the last 2 years. Why?
“Have you considered how it is possible that in the case of a project that serves diversification and security of supply in Europe, then the consortium made agreements with nine companies which didn't have any significant presence in this region. We are very sorry that something that started as a Verdi opera ended up as a soap opera.”
He said it remained to be see what the next steps would be.
The SEEP project showed how efficient it could be to create a virtual corridor to get existing resources to the locations of use. “These corridors require the clear identification of existing parts of the corridor and the identification of the places where they need to be supplemented."
The EU, he said, had recently accepted a strategy for projects to be supported, which included five Hungarian gas projects. The role of Greece was also set to increase, and Turkey had won itself a position as a transit power.
He added: “Hungary, because of its existing pipelines and geographical position, is a very important hub because we play a part in transiting existing resources.”
Then, Minister Kovács recalled the countries that were left in the lurch by the Nabucco loss.
“The Visegrad 4 has similar positions in this respect: we have east-west supply routes, there's a lot of fossil fuel used and these are very fragmented and small markets.” In a Visegrad 4 ministers meeting, he said, one of the key issues was security of supply. “We established the regional gas forum as well; the first meeting was held in October, with gas exchanges participating.”
According to him, the vision for the Visegrad 4 region was the so-called “Gas Target Model” and its adaptation for the Central European markets. Minister Kovács explained: “We have to find ways to come up with uniform systems and procedures. We'd like to see 'one-stop shop' arrangements, for example, someone wanting to purchase gas from the Caspian sea and transferring it to domestic markets, just like buying a single train ticket when you want to travel somewhere.
“Our key priority now is to clarify Europe's priorities, both internally and in terms of its external relations. The last 1,000 years of our histories have caused major divides in Europe and the resolution of this fragmentation cannot be expected from the market. It is only as Europe that we can strike good deals with Azeri, Russian or Chinese partners – it is our concept to let projects compete freely with each other,” he said.
Read more from the Minister's speech here.