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The Times: Turks shun gas project in genocide row

April 6, 2007
Carl Mortished, International Business Editor

Turkey has pulled out of talks with Gaz de France over a €4.5 billion (£3 billion) gas pipeline project in protest over a French law that prohibits denial of the massacre of Armenians during the Ottoman Empire.

The Nabucco project, a 3,300km pipe, which would bring central Asian gas to Europe, is seeking support from leading gas utilities, but the project is becoming embroiled in political difficulties.

Botas, the Turkish state pipeline company, is reported to oppose the participation of Gaz de France because of the French Government’s stance on the Armenian issue.

The controversial Bill, passed last year in the French parliament, makes it a crime to deny that a genocide of Armenians took place in Turkey during the First World War.

The row with Gaz de France occurs as the Nabucco promoters prepare to announce an “open season” for gas buyers interested in a share of the Nabucco gas. A slate of potential buyers is needed if the project is to secure financing.

The Nabucco project is led by OMV, the Austrian energy group, and is vigorously promoted by the European Commission, which wants to lessen Europe’s reliance on Russian and Algerian gas.

The Commission is expected soon to appoint a high-level official to promote and coordinate the project. Gaz de France would join a consortium that, in addition to OMV, includes Hungary’s MOL, Botas, Bulgargas and Romania’s Transgas.

Rival firms that might seek a stake in Nabucco as the sixth partner include Total, E.ON and RWE of Germany.

Turkey has ambitions to become a hub for the collection of gas from the Caspian and the Middle East and its onward transport to Europe. However, the promoters of Nabucco face a greater political obstacle in Gazprom, which has the lion’s share of the Eastern European gas market and has voiced its strong opposition to a rival transit pipeline.

The first link in the chain is the Shah Deniz project, a pipeline recently completed by a BP consortium that traverses the Caucasus, bringing gas from the Caspian Sea to Erzurum, a gas hub in Eastern Turkey.

In February Greece and Italy agreed to work together on a 212 km pipeline across the Adriatic. Talks have also commenced between Shell, Botas and the Iraqi Government over the export of Iraqi gas to Europe, via Turkey. At the same time, negotiations continue between Azerbaijan and Turkmenistan over a sub-sea pipeline that would link with gas reserves further east.

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