Egypt interested in Nabucco which is out of EU-backed energy projects list, foreign minister says

The Egyptian foreign minister Ahmad Abul Gheith expressed the country’s appetite for the Nabucco project after a bilateral meeting with the Romanian counterpart Cristian Diaconescu.

Egypt is an important gas and oil producer having a gas liquefying terminal since 2005 and exporting gas to Jordan through a direct pipe which will be extended in Syria and possibly in Turkey, a country crossed by Nabucco.

The ministers meeting in Brussels tackled the power projects that would receive financial aid from the European Union and the resolutions of the spring European Council, as part of the European economic recovery plan. Every decision needs a consensus, so Romania is entitled to block the progress of the meeting.

Romania cannot agree to the accepting of the power package without Nabucco, Diaconescu said today, adding the dialog will continue this week. Romania’s stance is backed by Austria, Poland and Slovakia.

Insuring a stable energy supply has become a top priority for the EU since Russia seized gas deliveries for Europe for almost a fortnight in January. To that end, it decided to allot 5 billion euros for power projects, broadband internet webs and ecological projects and 3.5 billion euros alone for the development of interconnecting gas pipes, electricity webs, marine eolian energy projects and CO2 storing technologies.

Among the financed projects is the Nabucco pipeline, although analysts say that only a fifth of the necessary gas resources are available so far. The union will announce its decision as to the project at the energy summit on May 7.

The World Bank is also interested in helping with the construction of the pipeline, if an agreement is reached about the natural gas supply.

The Nabucco pipeline, for which the Hungarian Prime Minister Ferenc Gyurcsany urgently requested European help, was to receive 250 million euros, not as a direct investment but as a mechanism for drawing funds and bank loans. The funds were later on reduced by 50 million euros. Nabucco will transit Romanian territory and the total cost of the pipe is now estimated at almost 8 billion euros.

"Romania urges that Nabucco be kept on this list," Diaconescu said, explaining he cannot go through with replacing the name of the project with the expression "Southern corridor projects."

The expression used by the European Commission refers both to Nabucco and the interconnecting pipe Turkey-Greece-Italy which would get a part of the 200 million, the sum for Nabucco reducing. The money would not be granted directly to the Nabucco consortium, but to the European Investment Bank as a financing package to help with lending for the pipe construction works.

Nabucco is designed to diminish Europe's dependence on the Russian gas. The consortium for Nabucco includes Austria (OMV), Hungary (MOL), Romania (Transgaz), Bulgaria (Bulgargaz), Turkey (Botas) and Germany (RWE).

The main competitor of Nabucco is Russia’s South Stream. This pipeline will be constructed by Russian gas giant Gazprom and Italian group ENI and will link Russia with Italy by crossing through Bulgaria and Greece and Russia with Austria by passing through Bulgaria and Serbia. The project is estimated to stand around 14 billion U.S. dollars.