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Prague energy summit

av/rm, afp/dpa/apMay 8, 2009

In an attempt to reduce their reliance on Russian gas, EU leaders have met with colleagues from the so-called "New Silk Road" in Prague to discuss building new pipelines.

A maze of natural gas pipes
Can the EU guarantee its gas supply?Image: AP

While hoping to walk away from the summit with concrete commitments for a "corridor agreement", the European Union has had to settle for a watered-down version of its original proposal.

It had sought to outline the steps for construction of new gas links to Azerbaijan, Egypt, Georgia, Iraq, Kazakhstan, Turkey, Turkmenistan and Uzbekistan.

However, the deal reached in Prague now only asks the gas producers to identify "non-committed natural gas and oil volumes ... that can be dedicated specifically to the EU."

The less than hopeful note for the EU came at the end of the summit on Friday, when Kazakhstan, Turkmenistan and Uzbekistan did not sign the declaration.

At the meeting in Prague, the EU had sought to ensure the security of its gas supplies, after a dispute between Russia and the Ukraine last winter cut off natural gas supplies to Europe. Russia currently supplies up to 40 percent of the natural gas consumed in the EU.

It also hoped to re-affirm its members' commitment to expand half a dozen east-west pipelines that will bypass Russia and in particular to kick start construction of the Nabucco pipeline.

Originally proposed in 2002, the Nabucco pipeline will transport natural gas from the Caspian region to Europe. Specifically, the pipeline will run from eastern Turkey to Austria. Estimated costs currently hover around 10 billion euros (13.4 billion dollars).

Seeking future guarantees

Natural gas facility
Austria would be a terminus for the gas pipelineImage: OMV

However, construction has been held up - not only by the lack of available financing due to the global economic slowdown - but also because of a dispute between Turkey and Azerbaijan over the cost of shipping gas from Azerbaijan.

Turkey’s President Abdullah Gul announced at the summit his country supported Nabucco pipeline "at the highest level."

The deal also called on Turkey and EU states involved in planning the pipeline to come to an agreement by the end of June that would clearly establish rules for governing transit fees.

While the Nabucco pipeline remains the EU's preference, it also supports the Inter-Connector pipeline. That pipeline would carry Caspian gas through Turkey, and across Greece to Italy. It also backs the White Stream pipeline, which would carry gas under the Black Sea from Georgia to Ukraine, or directly to EU member Romania.

European demand for natural gas continues to grow steadily. In 2007, the EU consumed 580 billion cubic meters. That demand is expected to grow to 750 billion cubic meters by 2030.

The European Union's overall goal is to obtain some 10 percent of the gas it burns, or roughly 60 billion cubic meters per year, from the Middle East and Central Asia by 2020.