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EU in key deal for more Caspian gas

Prague, May 9, 2009

The European Union moved to curb its heavy dependence on Russian gas yesterday by signing an agreement to smooth the way for more imports from the Caspian region.

In return for their commitment to supply gas to Europe, the EU offered to provide more trade and stronger transport links to gas transit countries such as Turkey and Azerbaijan, which form a so-called 'southern corridor', according to a report in our sister publication the Gulf Daily News.

The agreement, signed by leaders from Europe, Azerbaijan, Turkey and Georgia, envisions the creation of a central EU gas-buying consortium and new terms for the transport of Caspian gas.

'Our strategic priority in the EU is to enhance energy security, in particular by diversifying energy sources and energy routes,' said European Commission president Jose Manuel Barroso.

'The southern corridor initiative is a key priority project.

'Producer countries have committed to dedicating specific volumes of gas supplies for the corridor and for the EU, with a precise timetable for availability,' Barroso added.

At the heart of the plan is a proposal to build the 3,300 km Nabucco pipeline to carry Caspian gas via Turkey, Bulgaria, Romania and Hungary to Austria.

But its commercial backers have only secured a fifth of the gas needed to make the $10 billion pipeline viable.

Czech Prime Minister Mirek Topolanek, whose country hosted the meeting of in Prague, described the wider project as a 'new silk road' that would also aid the flow of information, goods and people.

The 11 leaders and ministers at the summit agreed EU countries and Turkey will sign an intergovernmental deal on conditions for putting gas through Nabucco by the end of next month - a move that would remove one of the main uncertainties for potential investors.

'We have the determination and we are ready,' said Turkish President Abdullah Gul.

'There is no hesitation, so we can go ahead.'

The EU has talked about diversifying its gas supplies for decades, to no avail, but has strengthened its resolve since a row between Russia and transit country Ukraine in January left European homes unheated.

Simmering tensions with Moscow since Russia's brief war with Georgia last August also added to the EU's determination. – TradeArabia News Service




Tags: Russia | European Union | Prague | Caspian gas |

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