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November 15, 2009, Sunday

White stream

All the major natural gas pipeline projects proposed over the last several years have been named “streams,” like Blue Stream-2, Nord Stream and South Stream.They are well-known, well-publicized projects. However, there is also one project that is not well-known and not publicized. It is called the White Stream project.

White Stream as an idea was initially suggested by Ukrainian officials in 2005. Following this, it was discussed at different international energy conferences and gradually achieved project status. In May 2007 it was presented at the Vienna gas forum, and on Oct. 11, 2007, at the summit-level Energy Security Conference in Vilnius. On Jan. 28, 2008, Ukrainian Prime Minister Yulia Tymoshenko asked the EU to consider taking part in the White Stream project. On May 28, 2008, the European Commission identified the project as a “Project of Common Interest” and furthermore accepted it as a “Priority Project.”

In addition to another well-known project, Nabucco, it is one of several “diversification projects” in the Southern Gas Corridor, promoted by the EU, which has started co-funding the project company under its TEN-E program, to conduct studies on the project. In this regard the first TEN-E grant was supported by the government of Romania. The second grant was supported by the governments of Romania, Poland and Lithuania.

The main difference between White Stream and the other major projects is that the latter is a private undertaking and is being promoted by a consortium of several companies in London, which includes the White Stream Pipeline and the Pipelines Systems Engineering companies.

The proposed pipeline would branch off from the South Caucasus Pipeline near the Georgian capital and run for 133 kilometers via Georgia to the Georgian Black Sea port of Supsa. From Supsa, there are two possible offshore routes: the first is the direct long undersea route from Supsa to Constanta in Romania, which is 1,105 kilometers; and the second is from Supsa to Constanza overland through Crimea with a short additional undersea pipeline.

According to White Stream Project General Manager Roberto Pirani, the company hopes to sign a general project agreement in 2010, complete the design work by 2011, obtain an investment decision by 2012, start construction work by 2013 and see the first gas flow through the first of four strings by 2016.

The project received unexpected support from an important country last month. This country is Azerbaijan, which until last month had refrained from backing the project in clear terms. During the government’s special session on gas and energy issues, President İlham Aliyev mentioned the possible export of Azerbaijani gas across the Black Sea. In this regard he referred both to White Stream and liquefied natural gas (LNG) as possible solutions currently under consideration.

Aliyev discussed the White Stream proposal for the first time with Romanian President Trajan Basescu in late September in Bucharest, where the two presidents signed a strategic partnership agreement. With Azeri backing, the White Stream project has become a new hope both for the EU and for Georgia and Ukraine.

In fact, White Stream is an alternative project to both Nabucco and South Stream. It aims to transport 8 billion cubic meters (bcm) of gas from the Caspian Basin to Europe. It is, of course, too early to say anything about its progress, but nonetheless it is being discussed seriously after Aliyev’s positive remarks. Therefore, it has entered the “Caspian gas equation” as a new variable, to be watched closely. Given the difficulties and uncertainties of other “streams,” it might well become a viable project in the future, who knows.

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