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20 Mar, 2009 22:30

Nabucco pipeline back among EU priorities

EU ministers have changed their stance on the Nabucco pipeline project, putting it back onto the list of top priorities. It comes despite a decision taken on Thursday to exclude the project from the EU agenda.

Ministers approved a five billion euro package aimed at providing added stimulus to the economies of all 27 member states, which includes money for the Nabucco pipeline.

The news comes amidst talks the project was ‘slowly dying’.

Poland and other Central and Eastern European countries pushed for the Nabucco gas pipeline project during the two-day EU summit. Germany, Italy and France questioned the feasibility of the project in the current economic climate, but have now accepted the deal.

German Chancellor Angela Merkel apparently gave in to pressure, requesting in exchange that sums be spent quickly to help Europe’s economic recovery in the short term, EurActiv reports. Indeed, the adopted document envisages spending two billion euro on energy projects in 2009, and another 1.975 billion in 2010. A total of 3.975 is to be spent on energy projects.

This may however mean the funding for Nabucco and other projects, favoured by Eastern European countries, could be lost, the site writes.

“East European countries are usually slow in absorbing EU funding,”
a diplomat told EurActiv.

According to Alexandr Vondra, the deputy prime minister of the Czech Republic, Nabucco is in the list of the first-place projects, the Ria Novosti news agency reports. He said around 200 million euro have been reserved for the project.

“If the speed of the project’s realisation is increased, it has good chances,” Vondra added.

The Nabucco pipeline is an alternate route to feed Central Asia gas to Europe, by-passing Russia. When built, it will supply around a third of Europe’s gas needs.

From the very beginning the project was considered a rival to Russia’s South Stream gas pipeline, designed to annually pump 31 billion cubic meters of natural gas from Russia and Central Asia via the Balkans to Europe. Bulgaria, Serbia, Hungary, Italy and Greece have already agreed to participate in the project.

The estimated cost of Nabucco pipeline, construction of which is planned to start in 2010, is $10 billion. The previously announced €250 million (approximately $323 million) allocated to start the project was recently cut to just €50 million ($64.5 million) due to the economic crisis.