The significance of the Nabucco pipeline for European gas supply cannot be stressed enough. It will serve as the final link to the Caspian corridor by connecting Turkey to Western Europe, securing access to over 60 000 bcm Caspian and Middle-Eastern gas reserves. Therefore this region is the gas richest region in the world. The Nabucco pipeline will therefore significantly increase diversity and security of supply for Europe in the longer term.
Nabucco is also the most viable transport route from the Caspian basin, both logistically and economically, making it more attractive than other alternatives being discussed.
The Intergovernmental Agreement, which was signed in 2009, is valid until 2059. It is significant in the development of Nabucco as it guarantees full political support from the transit countries; defines a unique legal framework; and outlines the transport tariff methodology, - thus ensuring the stability of the project in the longer term.
Nabucco’s objectives are:
- To open a new gas supply corridor into Europe
- To increase competition
50% of capacity will be auctioned amongst shareholders
50% of capacity will be reserved for third party access
A larger number of gas buyers will increase competition
A wider export portfolio will increase independence of producers
- To enhance market liquidity
10% of capacity will be assigned to short term contracts. Effective congestion management including the “use-it-or-lose-it” principle will be applied
- To meet market demand
By further expanding the system should demand exceed maximum capacity
- To enhance business activity between Europe, Turkey and gas producers in order to provide opportunities for investments for all involved
- The build up of long term contracts that will have a positive effect on the industry overall and benefit national economies
- To give the Nabucco partners the opportunity to connect their gas pipeline grids to the European gas network
- To encourage physical flows and gas swaps between traders and provide a variety of business opportunities
- One-stop-shop principle
Equal terms and conditions for 100% of capacity
The Nabucco project is being financed through a combination of investment from shareholders and debt financing from European financial institutions, mainly development banks.
Please click here for information on the Open Season process.