The Final Countdown

kristy Trendspotting

The final countdown

Will it be Nabucco? Will it be South Stream? Both? Neither?

You have heard the Nabucco versus South Stream debate being waged over the last few years about which new gas pipeline(s) will be built to serve Europe in its “Southern Corridor”.

Well, we now (almost) have an answer for you. The winner will be neither!

The first pipeline to get built will instead be a much smaller and more modest project: the Trans Adriatic Pipeline (TAP).

That, at any rate, is the prediction made by Friedbert Pflüger, the well-connected Director of the European Centre for Energy and Resource Security (EUCERS) at King’s College London, and a former German Member of Parliament and State Secretary in the first Merkel cabinet.

Most of you are probably familiar by now with the story: the European Commission is backing the prestigious Nabucco project, which is meant to bring large amounts of non-Russian gas to Europe and in which RWE and OMV are the main private shareholders. At the same time Russia – backed by ENI, Wintershall and EDF – is planning to build a whole new pipeline in the same region, but one that will obviously bring Russian gas into Europe. That’s South Stream, which is seen by many observers as a deliberate move by the Russians to forestall Nabucco.

Nabucco, meanwhile, has had to tolerate other, non-Russian rivals as well: smaller projects that are vying for the same gas from Azerbaijan that Nabucco needs. Those are the Trans Adriatic Pipeline (TAP), backed by Eon, Statoil and EGL, the Interconnector Turkey-Greece-Italy (ITGI), backed by DEPA and Edison, and the recently announced South-East Europe Pipeline (SEEP), an initiative of BP.

In a detailed exposition written for EER, Pflüger – who is also advising the Albanian government on gas policy – explains:

-why the shareholders of the Shah Deniz II consortium in Azerbaijan (currently the only supplier of new non-Russian gas) will have to decide very soon which pipeline project they will select for their gas

-why this will most likely be TAP

-and why there is a chance that South Stream might not be built after all

As to Nabucco, Pflüger argues that it is in effect too big and inflexible at this moment. It could only become viable if the European Commission is prepared to fully back it financially, he says.

We are very glad with this must-read article on a topic that will have a profound impact on European energy policy and the European energy market. To read it, click here.

Special E-World supplement: smart grids, Austrian gas hub, offshore wind

We would like to remind you that EER has just produced a Special Issue for the E-World Conference and Exhibition which will take place from 7 to 9 February in Essen, Germany.

It includes an exclusive interview with Gottfried Steiner, CEO of the Central European Gas Hub (CEGH) in Austria, and an in-depth report on European developments in smart grids written by our Italian correspondent James Osborne. It also includes an interview with Anders Eldrup, CEO of Dong Energy, on that company’s offshore wind strategy, which was published on our website last year.

E-World is one of the major annual energy conferences and exhibitions in Europe, attracting some 20,000 visitors. This year’s edition has signed up 540 exhibitors from 20 countries. Over the three days of the event, some 20 conferences will be held, on a wide variety of subjects.To read this special E-World issue, please go to our homepage and click on the banner.


6-8 February 2012 | Istanbul, Turkey

President of TPAO to speak at the EMEA Unconventional Gas E&P Forum

The forum will focus on technical challenges and commercial considerations in the EMEA region and discuss technologies integral to unlocking and optimising plays and case studies based on field-proven experience of successful unconventional gas developments.

21-22 March 2012 l Amsterdam, The Netherlands

RECS Market Meeting 2012

Make sure you don’t miss the opportunity to participate in the only conference that will give you a full picture of today’s market for renewable electricity. Find out what is driving the market, what is missing, what needs to be improved, who is bying renewable electricity and why?

Coming up on European Energy Review

LNG: the second wave is coming
The future of EU gas market – including interview with Sergei Komlev, Head of Contract Structuring and Price Formation Gazprom Export
Interview Professor Jan de Jager, ex-Shell: “unconventionals – easy to find but hard to produce”
Why Russia needs Qatar
Five reasons the Energy Efficiency Directive won’t work – and what can be done about it

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Danes decline oil, gas, coal and nuclear

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The newly elected Danish centre-left government has raised the CO2-reduction target from 20% to 40% by 2020 and wants a complete phasing out of all fossil fuel use by 2050. Denmark, poised to take up the EU Presidency in January, already has the highest energy prices in Europe, but the government believes its new green policies will be good for the economy: they will stimulate green technology with a big potential for jobs and exports.

European Energy Review is Europe’s foremost independent energy journal on the internet. It features original reports, interviews, analyses, viewpoints and debates from across Europe. Registration to our newsletter, which is free and without obligations, gives you full and free access to our website. For more information about EER, click here.