The Nabucco project, which was supposed to become an obstacle on the way of Russian gas pipeline to Europe, is suffering defeat on all fronts. This time bad news came from BP when its experts claimed that the project has no prospects. This was despite the fact that currently, BP is involved in developing the Shah Deniz gas field which is believed to be a key source for the Nabucco pipeline.

London City analysts went even further in their forecasts predicting that the project would be shelved by the end of June.

The German energy company RWE has already said it could withdraw from the project, while Hungary's MOL, which controls 100% gas of the natural gas transportation company FGSZ, one of Nabucco's shareholders simply refused to finance the construction of the pipeline and withdrew from the project.

According to the plan of the project's initiators, the Nabucco pipeline was supposed to carry gas from the Caspian region and Central Asia to the eastern borders of the European Union. It was deliberately designed to bypass Russia and was intended to reduce Europe's dependence on Russian gas. But even at the time, ten years ago, experts argued that the idea would have no future.

As a result, the countries that could have been the major suppliers of gas to the Nabucco project have one by one joined other projects which looked more promising. Gennady Shmal, head of the Union of Russian Oil and Gas Producers, assesses the current situation of energy resources for the project.

"Nabucco has never had a resource base, and this is still the case now. Its hopes for Azeri gas and the Shah-Deniz gas field have not materialized because the development of the Shah-Deniz second leg has been delayed. Azerbaijan has only a small amount of gas to supply to the Nabucco pipeline after meeting its domestic needs and fulfilling its contracts with Turkey and Georgia.

Turkmenistan, which was considered a potential supplier, has already constructed two gas pipelines to China and is building a third one. When that pipeline is completed, it will annually supply 65 billion cubic meters of gas to China. As a result, Turkmenistan will be unlikely to have much gas left to fill the Nabucco pipeline," Gennady Shmal said.

In November last year, many analysts warned that it would not make economic sense to launch the Nabucco project. This was the time when the Nord Stream pipeline which supplies Russian gas direct to Europe was launched. They also pointed to the supplies of liquefied natural gas to Europe from Qatar, Algeria and even the U.S. which supplemented the Russian supplies.

The economic forecasts according to which no economic growth was expected in Europe for the next 10-15 years also played their role. It is also a very costly project in itself, says co-director of the Analytical Department of the "Investcafe" agency, Grigory Birt.

"The cost of construction of the Nabucco pipeline per kilometer is approaching the price of the South Stream, the capacity of which is several times higher than that of Nabucco and which will be capable of satisfying the growing demand for gas in Europe.

Moreover, Turkey, one of the participants of the Nabucco project, has only recently allowed laying the South Stream pipeline through its territorial waters. All this means that Nabucco has little chance for success. The lower the capacity of the project, the less profitable that project will be," Grigory Birt said.

In fact, Turkey has also shown unwillingness to get involved in the project. It has yet to give Nabucco permission to lay the pipeline via its territory. Moreover, it is planning to launch a competing project jointly with Azerbaijan, Trans-Anatolian gas pipeline.

Source: Voice of Russia