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Caspian gas can compensate for lack of electricity because of reduced production at nuclear power plants in Europe

Oil&Gas Materials 9 April 2011 13:54 (UTC +04:00)

Azerbaijan, Baku, April 8 /Trend, E.Tariverdiyeva/
There are several significant factors that will contribute to rapid active promotion of projects under the Southern Corridor, a British expert at Chatham House Yuri Fedorov said.
"The tragedy at the nuclear power plant in Japan stimulated the disturbing sentiments in Europe and a negative attitude towards nuclear power. A number of European governments, for example, Germany and Switzerland, have already taken a decision to accelerate the program of decommissioning nuclear power plants, existing in these countries," Fedorov told Trend by telephone from Prague.
A magnitude-9 earthquake and tsunami smashed north-eastern Japan March 11, crippling the Fukushima Daiichi Nuclear Power Station, 250 kilometres north of Tokyo. It has been leaking radiation ever since.
"My point of view is that the danger of nuclear power today is strongly exaggerated, since the accident in Japan can not be used as an argument for closing programs on nuclear energy in Europe," Fedorov said. Neither Germany nor Switzerland, nor the majority of European states are located in earthquake zones. And the threat of a tsunami that destroyed the Fukushima-1 nuclear power plant simply does not exist for European countries."
But nevertheless, the expert said the nuclear energy issues are perceived negatively according to the public opinion. These fears are fueled by various business interests, he said. Fedorov said in democratic countries, governments can not ignore the sentiments of the people and programs related to nuclear power, already western countries began to review.
"Accordingly, a question arises, what can compensate for the reduction of electricity production at nuclear power plants. And the main way to compensate for the lack of energy is not so much an increase in consumption of fuel oil and other liquid fuels, but gas consumption - the most environmentally friendly fuel, which is very suitable for use in Europe," Fedorov said.
And here the problem of gas exports to Europe arises, which selects from the three ways relating to potential sources of natural gas, he said.
The first way is to increase gas exports from Africa and the Middle East, via North Africa, the expert said.

"But the West has concerns about the political risks associated with the recent outbreak of instability in the region in general, particularly in Libya, he said - although, most likely, any Libyan government, except the most radical fundamentalists, would be interested in exporting energy resources to Europe because simply they do not have other option of existence of the state."
However, the fact of the civil war and intervention of allies in the affairs of Libya increases the political risks, he said. Hence the attention will increase that is now observed with regards to the Nabucco project and obtaining gas from Central Asia and Azerbaijan, he said.
Nabucco, worth 7.9 billion euros, is designed to transport gas from the Caspian region and the Middle East to the EU. Construction is planned to start in 2012 and first supplies in 2015. Maximum capacity of the pipeline with length of 3,300 km will hit 31 billion cubic meters. Nabucco participants are the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE, each with equal share of 16.67 percent.
Azerbaijan and Iraq are considered to be the main gas suppliers in the project's first phase.
"The interest of the Turkmen government in Nabucco is increasing every day, since for the country it is a very profitable project to diversify its supplies to Europe," Fedorov said.
As for Russian gas, Fedorov said there are serious concerns in Europe that the increased dependence of the West on Russian energy sources can affect Europe's position in the political sense, and Moscow could use its resources as an instrument of political pressure.
"In this connection, the question arises about the South Stream, which is inferior to the Nabucco project, as there is no understanding of how much it will cost, the expert said. - The difference in estimates reaches $10 billion."
The South Stream is designed to transport Russian gas to Europe under the Black Sea bypassing Ukraine. The project is realized by Italy's ENI and Gazprom, which signed an agreement to build an offshore gas pipeline on June 23, 2007. The capacity of the 900 kilometer pipeline, which was planned to become operational in 2015, is intended to eventually reach 63 billion cubic meters per year. Total investment in the project is estimated at 25 billion euros.
In such a situation, no serious bank or consortium will dare to invest in the project, fearing that it would not pay back, said Fedorov.

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