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Gas Supply Options For Europe

Gas Supply Options For Europe

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At a meeting in Ankara on July 13th, the prime ministers of Turkey, Bulgaria, Romania, Hungary and Austria signed an agreement aimed at building the legal and regulatory underpinning for a new natural gas pipeline across their territories, linking Europe to gas sources in the Caspian Sea region and in the Middle East.

The United States congratulates the governments of Turkey, Bulgaria, Romania, Hungary and Austria on the signing of this Inter-governmental Agreement on the Nabucco pipeline project.

The United States, along with the European Union, supports the Nabucco pipeline project as a way to diversify Europe's suppliers and transport routes, in order to ensure stable delivery of natural gas. Europe receives one fourth of its natural gas from Gazprom, the world's largest natural gas extractor and Russia's largest company, 80 percent of which passes through Ukraine.

In January 2006, a dispute over gas prices and transit fees between Gazprom and the Ukrainian gas company Naftohaz caused Gazprom to cut off the flow of gas to parts of Europe. Gazprom and Ukraine again shut off gas supplies to parts of Europe in January 2009. The Nabucco pipeline project, which has been in the works since 2002, but has been delayed by lack of commitments from customers, transit nations and gas suppliers, got a significant boost as a result of the ongoing dispute.

Construction is scheduled to begin on the Nabucco project in 2011, and the pipeline is expected to begin operating in 2014. So far, Egypt, Iraq, Syria and Turkmenistan have expressed interest in supplying the Nabucco pipeline, and Azerbaijan has proclaimed an interest in the project.

"This Agreement is a significant milestone in achieving our shared vision of opening a new energy corridor that will bring Caspian gas to Europe," said U.S. State Department Spokesman Ian Kelly. "Energy security is gained through diversity – diversity of energy sources, delivery routes and consumer markets, and the Nabucco pipeline is an example of that diversity. While additional hard work lies ahead, signature of the Intergovernmental Agreement is an important step in realizing the Nabucco project."