All gas projects in the wider Black Sea and Caspian regions and South East Europe need to go forward, reads the final declaration of Natural Gas for Europe: Security and Partnership, the April 24-25 energy summit in Sofia, Bulgaria.
“Rapid development of international gas infrastructure, pipelines, LNG terminals and strategic storage depots will guarantee diversification of gas supplies to Europe in a sustainable and viable way,” the document reads. “We support the implementation of all infrastructure projects, which aim to diversify supply of hydrocarbons to Europe to guarantee the energy security of all participating countries.”
The document is a unequivocal display of political will from all 29 participating countries to develop alternative gas routes and diversify gas sources, said Bulgarian President Georgi Purvanov, the patron of the summit.
“Almost each summit speaker accentuated the principle of transparency and non-discrimination of countries,” Purvanov said. “Irrespective of its size, each country has its due place in the gas production, transit, receipt matrix.”
That said, the goal of the summit was achieved, he added.
Yet political malease burdened the meeting from the outset. The forum – also intended to steer gas dialogue between Russia and the EU – took place in the absence of Russian Prime Minister Vladimir Putin, who made a last-minute withdrawal. Original hopes were the sides would discuss Nabucco and South Stream ahead of the Prague May 9 energy summit where EU countries are expected to sign a breakthrough agreement on Nabucco. Russia will not be present in Prague.
Russian Energy Minister Sergei Shmatko, at the helm of the Russian delegation, said such talk was premature.
“It is too early to speak about Nabucco and South Stream, especially in competitive terms because the technical parameters of both projects are yet to be finalised,” the minister said. He expected, though, that South Stream gas would come cheaper than Nabucco’s to the final consumer.
Reinhardt Mitschek, head of the company running the Nabucco project, also shunned direct juxtaposition but said a final investment decision on Nabucco would come in 2010.
“Nabucco, just like any other pipeline, is not a panacea,” US Special Envoy for Eurasian Energy Richard L. Morningstar said. “It is important but is not Europe’s only energy security solution.”
The US is no less ready to act as an intermediary in finding international financing for the project, he said.
Speaking of South Stream, the US maintains a neutral position, Morningstar said. “We have some doubts regarding this project. It appears very expensive and with many question marks regarding its financial structure,” he added.
Agreements
Bulgarian President Georgi Purvanov said the summit was not intended to give specific solutions but rather outline concepts and bridge principles. Yet it did produce several concrete commitments that put the declaration’s wording into action.
Bulgaria signed two key agreements with Greece and Egypt, both intended to open its Russia-dependent gas infrastructure southwards.
Under a cooperation agreement sealed late Friday by Greek Development Minister Kostis Hatzidakis and Bulgarian Economy and Energy Minister Petar Dimitrov, Bulgaria and Greece will create a company to manage the construction of a new gas link between Komotini, Greece and Dimitrovgrad, Bulgaria. Bulgaria’s state-run energy giant Bulgarian Energy Holding (BEH) and Greek state Public Gas Corp. (DEPA) will be the stakeholders of the entity.
The second gas link between the countries will pump gas from the Turkey-Greece-Italy (TGI) pipeline. The project has already received 45 million leva (24.5 million euro) in EU funding and is expected to be built until the end of 2010.
The parties also commit to build a new LNG terminal, which would feed Bulgaria with gas from Azerbaijan, Egypt and Turkey.
Greek Prime Minister Kostas Karamanlis told participants earlier on Friday that plans were to locate it on the Aegean sea, most probably Kavala. The tentative cost of the project is 500 million euro.
Egypt, a country already in busy gas talks with Greece, added Bulgaria to its gas partner list.
Dimitrov and Egyptian Oil Minister Sameh Fahmi signed an oil and gas cooperation agreement.
Under it, Egypt is ready to sell gas to Bulgaria. Transportation will become economically feasible once Turkey and Egypt complete works on its first 60km gas link.
Bulgaria and Turkey are yet to build their first gas connection.
Bulgarian companies will also be allowed to survey and drill Egyptian oil and gas wells, Fahmi said.