U.S.-Backed Nabucco Pipeline Takes Baby Steps

A U.S.-backed gas pipeline that would reduce Europe's dependence on Russian energy supplies received a fillip earlier this month when German power giant RWE joined the project, but questions about where the Nabucco pipeline's supplies will come from persist.

"Nabucco has got the cart before the horse. It's all driven by an increase in demand for gas in Europe and the drive to diversify supplies away from Russia," said Andrew Neff, senior energy analyst in Istanbul, Turkey, with Global Insight, a London-based think tank. "Putting infrastructure in place has become a political animal more than a commercial venture."

Still, RWE coming on board gives hope to the U.S.-backed project, which not very long ago was looking dead in the water because of rival pipeline plans. Work on the 2,050-mile pipeline, which would carry 31 billion cubic meters of Central Asian or Middle Eastern gas through Turkey and the Balkans to Austria, is expected to begin next year and be completed by 2012; deliveries are expected to start in 2013.

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