January 27, 2009, 8:52 CET

Politicians gather in Budapest for Nabucco pipeline summit

Presidents, prime ministers and energy ministers from 12 countries, together with representatives of several international organisations are arriving in Budapest to participate in the Nabucco gas pipeline summit opening on Tuesday.

The pipeline construction's biggest aim would be to relieve European countries of their dependence solely on Russian gas from 2013.

One of Nabucco's major possible suppliers, Azerbaijan is seeking concrete proposals on plans to build the pipeline. President Ilham Aliyev told MTI on Monday that there were many important issues which had yet to be clarified. Open questions still revolve around transit contracts, financing and the political background, he said.

He said Azerbaijan had many offers on the table, and its gas output is entirely sufficient to supply currently operating pipelines.

Turkey, a transit country, would use up to 16 percent of the natural gas proportional to its investment in the project, Energy and Natural Resources Minister Hilmi Guler told MTI on Monday in Budapest.

The minister said Caucasian countries would be reliable partners in supplying gas to the pipeline.

Iraq would be a possible contributor, but its participation in the project has not yet been decided, the undersecretary of the Iraqi Ministry of Oil said on Monday in Budapest.

The final decision depends on the progress of Iraq's energy development plan, said Motassam Kik. However, it is important for Iraq to maintain links with the Nabucco project, he added.

Thanks to new exploration in Iraq in the next ten years, natural gas reserves are expected to grow to over six billion cubic metres, he said.

Meanwhile, Hungary, on the receiving part of the pipeline plans to propose an EU pre-financing agreement on the project, as well as a setup of an international Nabucco body, head of parliament's ad-hoc committee for the Nabucco Janos Koka said.

Koka met Prime Minister Ferenc Gyurcsany on Monday and agreed that a pre-financing agreement was necessary.

Koka said in addition to Azerbaijan, Turkmenistan Iraq and Egypt, in the long run Iran could also be considered as a supplier for the 3,300 km- long pipeline. Iran has not been invited to the talks for political reasons.

In Koka's view Nabucco is the most important energy project for central and eastern Europe. Alternative gas sources can serve not only the purpose of safety of supplies but also keep prices at bay.

It is estimated that Europe would need 150-160 billion cubic metres more gas annually by 2020 and the Nabucco could provide 31 billion cubic metres of this need.

The Nabucco pipeline is not a purely business project but ties in with one of the most important pledges of European independence, and therefore it should receive common funding, Hungary's prime minister told a news conference on Monday.

The European Union and its background institutions as well as national governments should fund the first stage to build the pipeline, Ferenc Gyurcsany said.

The Nabucco pipeline, estimated to cost around 8 billion euros to build, is envisaged as transporting natural gas to Western Europe - from the Caspian region to Austria, via Bulgaria, Romania, and Hungary.

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