* Parallel development avoids transit monopoly-White Stream
* Provide EU security of supply
* Critics say project faces legal difficulty, lacks partners
By Henning Gloystein
LONDON, Nov 29 (Reuters) - A parallel development of the Nabucco and White Stream gas pipelines would provide Europe with its targeted supply and transit security, White Stream’s chairman said on Tuesday.
Under the European Union’s Southern Gas Corridor project that aims to diversify the EU’s gas supplies away from Russia, Nabucco plans to transport over 30 billion cubic meters (bcm) of central Asian gas a year through Turkey and into Austria and western Europe.
Nabucco’s main backers are German utility RWE and Austrian energy company OMV.
White Stream is being developed by a consortium of international European and American energy professionals. The White Stream website says the consortium includes the White Stream Pipeline Company Limited, registered in Britain and GUEU Inc, registered in the U.S. state of Delaware.
The White Stream project, which so far lacks major development partners, plans to initially transport 8 bcm of Azeri gas via the Black Sea into Ukraine and Romania.
Other pipeline projects that aim to pump Azeri gas into Europe under the Southern Gas Corridor plans are TAP and ITGI.
The overall Southern Gas Corridor - including all competing projects - has a project scale of 30 to 45 billion euros, according to Tom Dimitroff, partner at energy infrastructure consultancy IDP.
“A concurrent development of Nabucco and White Stream will provide enhanced supply diversity and wholesale gas competition as well as avoid a transit monopoly in Turkey,” White Stream’s chairman and managing director Roberto Pirani said during the O&G Pipe conference in London.
Pirani said that Europe was “a little bit squeezed by a dominant gas supplier from Russia, and that without the Southern Gas Corridor there will be no diversification of gas supply for Europe.”
But Pirani said White Stream was not competitor to Nabucco or other projects of the Southern Gas Corridor.
“What we want to avoid is competition with Nabucco,” Pirani said and added that while Azeri national gas supply company Socar was committed to Nabucco, Azerbaijan did not want to be exposed to a transit monopoly in Turkey for shipping its gas to Europe.
He also said that Azerbaijan had enough gas reserves in the longer term for a second large pipeline project, and that the country expected to produce 50 to 55 bcm per year of gas by 2025.
White Stream plans to begin commercial operations by 2018, and the project is estimated to cost around 4.5 billion euros.
Its initial transport capacity would be 8 bcm per year, with the possibility for expansion to 16 and ultimately 32 bcm a year.
Critics say that White Stream faces unresolved legal difficulties in the Black Sea where the pipe would likely pass through Turkey’s exclusive economic zone (EEZ).
“While it is legally hard to stop construction of a pipeline on the basis of an EEZ, it is very easy to slow it down by several years and hence increase a project’s cost,” Mikhail Korchemkin, executive director of consultancy East European Gas Analysis, said during the same conference.
“That is why Gazprom decided to bypass Ukraine and find a bilateral agreement with Turkey with its Black Sea projects,” he added.
Turkey has not signed or ratified the United Nations maritime agreement UNCLOS, and analysts say that White Stream could be challenged by Turkey as it has an interest in gas transit fees by shipping Azeri gas through its territory rather than pump it to Europe through the Black Sea.
Critics also say that White Stream lacks development partners, although Pirani told Reuters on the sidelines of the conference that there were negotiations with Socar and another regional supplier as well as western European energy companies. (Reporting by Henning Gloystein; editing by Keiron Henderson)