Nabucco and South Stream: An Economic and Market Analysis

The paper compares the difficulties that the South Stream and the Nabucco gas pipeline projects face. The paper argues that South Stream, despite significant media commentary to the contrary, is not actually a competitor to Nabucco in the sense that the former would merely switch existing demand from one set of pipes to another. The paper also analyses the impacts on consumer prices, possible delays of construction and financing difficulties, while the crucial aspect of gas supply from the Caspian region also gets special attention. The paper also looks at European commitment to Nabucco and also suggests a feasible alternative to ensuring access to Central Asian gas by building a Liquid Natural Gas (LNG) liquefaction plant located at the Turkish port of Ceyhan.