Energy geo-politics - How Europe needs Iran / Turkey / Bulgaria / Romania

EU solidarity on energy plans and trade embargoes with Iran both have taken a severe blow with news from Teheran. It also emphasise the supreme inportance of a tiny village (pop 190) in Eastern Austria.

1. Nosratollah Seifi, the managing director of the National Iranian Gas Export Company (NIGEC) has announced the transfer of transfer of 0.5 to 4.5 billion cubic meters of Iran’s gas intended to be used in markets like Italy to Switzerland with gas transfer via a pipeline passing through Turkey. The deal was signed 3 weeks ago. Turkey has agreed to the transfer across their territory.

2. Michael Peisser and Udo Raap, joint managing directors of Austrian EconGas have announced (EconGas is a joint venture between BEGAS (2.6%), EVN (15.7%), Linz AG (0.45%), OMV Gas International (50%),OÖ. Ferngas AG (15.55%) and WIEN ENERGIE (15.7%) ) they are looking to source 10 billion cubic meters of gas per year from Iran. Econgas currently supply industrial markets in Germany, Hungary and The Czech Republic.

The Swiss are also considering other routes such as through Georgia and the Black Sea. Austria is also backing the Nabucco pipeline project to get gas from the Caspian area into central Europe, and Iranian gas could be fed into this.

The Nabucco gas pipeline will be 3,300 km (2,050 miles) long it should start carrying gas from 201 and will guarantee the supply of about 30 bn cm of gas a year to Central Europe by 2015. It will route Iranian gas via Erzerum (Turkey) , Istanbul, Bulgaria, Romania,Hungary to the Austrian Baumgarten gas hub. The pipeline is considered an alternative to the Russian gas supply to Europe.See EU map here

Baumgarten an der March is the entry point for Russian gas to Europe and takes advantage of using exhausted local gas fields as resevoirs - Matzen, Puchkirchen, Tallesbrunn, Schönkirchen Reyersdorf, Thann and Zwerndorf. Its role as a natural gas hub ( and therefore a supremely critical node in the security of energy supply in Europe) will increase further with the construction of the Nabucco pipeline.

The current Nabucco shareholders are OMV (Austria) MOL (Hungary) Transgaz (Romania) Bulgargaz (Bulgaria) BOTAS (Turkey) - Gaz de France and Total, and German E.ON Ruhrgas and RWE are also interested in a stake as well as Gazprom.

The EU on current projections will require an additional 200 to 300 billion cubic meters of natural gas per year in 25 years - i.e about another 10 Nabucco's.