John Laughland in The European Journal reports: Europe has been seeking to reduce its dependency on Russian gas pipelines by building yet another pipeline which bypasses the territory of its biggest supplier and transports gas from Central Asia via Turkey. This is known as the Nabucco pipelines – but it is on the verge of collapse. Kazakhstan and Azerbaijan have showed little interest in cooperating with the West on the project and that is why it is unlikely to get anywhere.

The German Chancellor, Angela Merkel, has recently been trying to woo the President of Turkmenistan, one of the other supplier countries on the Caspian Sea, but with little success.

While the EU is trying to set up a consortium of European buyers in order to strengthen Europe’s market power, Russia has instead negotiated agreements with the Caspian states to buy gas directly from them and then ship it to Europe through its own networks. Gazprom, for instance, has offered to buy the whole of Azerbaijan’s gas production and it seems that Baku is ready to accept the deal.

Naturally, the events in the Caucasus over the summer have shown that American influence in the region is in fact a chimera and that only Moscow can protect the security of the pipelines. Azerbaijan does not apparently intend to supply any further Western pipelines which bypass Russia (there are currently two). Kazakh government sources (the economics minister) have also told Western newspapers (the Handelsblatt) that they are under great pressure from Moscow not to supply gas for the Nabucco pipeline. The same goes for Turkmenistan, where the EU energy commissar (a Lithuanian) was recently rebuffed in his request for Turkmen gas for Nabucco.

The only way of making the gas pipeline viable is therefore now for Iran to supply it, but that is considered political undesirable. There are also problems within the Nabucco consortium itself. The Turkish gas company Botas, which is part of the Austrian-led consortium, does not want Turkey to be a mere transit country: it wants 15 per cent of the gas for itself, and it wants it at a special low price. Given the pipeline’s capacity, this represents some 4.5 billion cubic metres a year, two thirds of which Ankara will use and one third of which it will sell. Naturally, the other members of the consortium are not happy with this proposal, since it means they would have to subsidise the special Turkish prices.

According to the Hungarian Nabucco delegate, the whole project would be simply unviable under such circumstances. The same EU energy commissar, the hapless Mr Piebalgs, also recently failed to persuade the Turks to change their minds on this. [Matthias Brüggmann & Gerd Höhler, Handelsblatt, 12 November 2008]