The future of Europe's gas infrastructure

Timon Singh

Whether the EU likes to admit it or not, the continent is reliant on external energy supplies in order to power itself. Today, almost half of the EU's natural gas imports come from Russia, along with 30 percent of its oil supplies and Russia is keen for this to continue. However, certain European governments are less sure about being reliant on a sole supplier and have sought to break Russian dependency by diversifying the continent's energy suppliers, ensuring Europe's natural gas future.

In order to keep Europe supplied with natural gas, several pipelines have been set up in order to keep the continent's homes warm and their economies stable. Here, EU Infrastructure looks at the assorted pipelines that are all hoping to be the main supplier to Europe.

Nord Stream

Projected to cost €8.8 billion and several years in the planning, the Nord Stream pipeline aims for Russia to supply Germany and other EU countries with approximately 55 billion cubic metres of gas per year - a move that many feel will cement Europe's dependency on Russian energy.

The project will see a 1200-kilometer (750-mile) gas supply link, which will ultimately comprise of two parallel pipelines, provide an alternative to existing pipelines that travel through the Ukraine. Previous disputes between Russia and the Ukraine have left many European government worried about potential energy disruptions.

The main concern from Brussels though, is that Gazprom, and other state-run Russian companies, have massive stakes in the project. Gazprom, for example, owns 51 percent of Nord Stream whereas Germany's BASF-Wintershall and E.On Ruhrgas each hold 20 percent, and Gasunie of the Netherlands has nine percent. Then there are also the environmental concerns with many fearing the project will increase pollution in the Baltic.

The pipeline is already under construction and looks to be the first major pipeline to become operational. Currently, the completion of the first line is set for 2011, with the second due to be finished a year later.

Nabucco Pipeline

Dubbed the 'Gas bridge between Asia and Europe', the €7.9 billion, 3300km-long pipeline will attempt to break Russian dependency by exploiting the gas reserves in the Caspian and Middle East regions. Snaking through Turkey, Bulgaria, Romania, Hungary and into Austria, Germany and the Czech Republic, the Nabucco Pipeline with send supplies from Iraq and Azerbaijan straight into Europe.

Despite its intentions, both Nord Stream and South Stream will become operational before it and in recent weeks, the Russians have secured deals with several European countries to not only supply them but get them involved in their projects, such as South Stream.

Russia has already secured Italy's custom with the South Stream pipeline, whilst Germany is planning to secure a large percentage of its gas from Nord Stream.

That is not the only problem, Nabucco is facing. Azerbaijan recently stated it was pushing back the development of the Shah-Deniz gas field, one of the main sources of gas for the European pipeline. This delaying of the field development until 2016 has officially put the Nabucco project in trouble, as without a source of gas, it could potentially be scrapped.

South Stream

Headed by Russian gas giant Gazprom, the South Stream project aims to bypass Ukraine, where Russia has had well known political disputes and gas supply disputes, and transport Russian gas under the Black Sea to Bulgaria and inwards to Serbia and Europe.

It is the main rival to the Brussels-backed Nabucco pipeline, which aims to bring Caspian and Central Asian gas to Europe, bypassing Russia and ending Europe's dependency on the resource-rich state.

The South Stream project has recently been finding support in Europe with Italy's ENI and France's EDF officially joining the plan. Austria also signed a deal to join the project last week, putting another nail in Nabucco's coffin.

Other gas sources

With Russia seemingly having a monopoly on supplying the continent with gas, spending on infrastructure to deliver natural gas to consumers from new sources of the fuel such as from Africa, Turkmenistan and Kazakhstan have been touted in many circles.

A recent study revealed that Europe may need to import an extra 180 billion cubic meters of natural gas annually by 2020, stretching available supplies as China, India and Pacific member nations of the Organization for Economic Development and Cooperation seek more natural gas.

Another source that could provide more gas for the world is discoveries of shale gas in the US and Poland, which has freed up supplies for the rest of the world. As such, new sources of gas from Africa or Turkmenistan and Kazakhstan would help satisfy demand in Europe... but this is only if Nabucco is ever completed... or started.

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