CASPIAN BASIN: WHICH WAY IS UP FOR REGIONAL ENERGY DEVELOPMENT? (Eurasia analysis)

May 15 could become the official birth date of a pipeline that would help Russia maintain its virtual monopoly of natural gas exports to Europe. Whether the energy export project grows to maturity remains to be seen.

Officials from Bulgaria, Greece, Italy, Serbia and Russia convened in the Russian resort city of Sochi on May 15 to sign agreements to hasten the construction of the so-called South Stream pipeline. The pacts appear to give South Stream a commanding lead over the rival, US-backed Nabucco project in the race to deliver Caspian Basin natural gas to European markets. Many experts believe that given present energy reserve estimates and political conditions, only one of the pipelines can be viable. [For background see the Eurasia Insight archive].

A report by the official Russian news agency RIA Novosti, citing an official at the state-run conglomerate Gazprom, said that the agreements signed May 15 will mean the South Stream route can be operational by the end of 2015. "The overall investment required will be calculated on the basis of a comprehensive study," RIA Novosti quoted the unnamed Gazprom official as saying. The pipeline’s precise route should be determined by the end of 2009, the report added.