Turkey said talks are underway on several key issues of Nabucco project

PanARMENIAN.Net - A European Union official said on Friday that an imminent breakthrough looms on the draft of the text that will lay the legal framework for the Nabucco pipeline project, however Turkey said talks are underway on several key issues, Hurriyet DailyNews reports.



Consensus was reached Monday on the draft of the inter-government agreement for the Nabucco pipeline planned to carry Caspian natural gas to Europe via Turkey. "If no government party to the agreement raises an objection by Friday night, then this will mean that there is a complete consensus on the document which will be signed in July," the EU official told a group of journalists.



However, later on Friday a Turkish official denied the report of an agreement, saying the EU had sent the document but Ankara rejected any time pressures imposed to accept the draft. "We responded saying such attempts will be non-efficient and will not bear any results. This response was sent to everybody related to the issue in the European Union," the official Reuters news agency.



There have been thorny negotiations over the document regarding taxing issues, as well as Turkey's request to have 15 percent of the gas passing through the pipeline allocated to meet local energy needs. Reuters quoted the officials as saying that an agreement was reached on the taxation issues but talks continue on Turkey's request.



"Reaching an agreement on the tax regime was very difficult, since there is one entity, which is the consortium of the pipeline, but operating in different countries," the official said.



The pipeline, which will pass through Turkey, Bulgaria, Romania, Hungary and Austria, is made up of a consortium of Austria's OMV, Germany's RWE, and the gas companies of Turkey, Hungary, Romania and Bulgaria.



"It was very difficult to reach a consensus on the tax regime, but they did find a formula," said the EU official who did not want to elaborate on the details of the formula.



A formula seems to have been found on Turkey's request for a 15 percent lift off, but the official did not share the details. During last month's Prague summit, bringing the EU together with gas producing countries, it was announced that Turkey had dropped its 15 percent lift off request and the intergovernmental agreement would be signed in June. "But Turkey was not happy," said the official, without going into detail how the disagreement on the issue was solved.



It appears that Turkey and the other consumer countries in the European Union will hold joint negotiations with the producer countries, instead of pushing for separate deals.



"Turkey and the EU have the same problem of energy supply and energy diversification. We are together on this. The bargaining with Caspian suppliers will be done as a group," the official said.



Reaching a deal on the intergovernmental agreement represents an important turning point in the realization of the project according to the official. It not only shows the political will of the countries party to the project, but it also enables the consortium to go ahead with negotiations with producer countries, taking the project to another phase.