Albania could join South Stream project!

Countries neighboring Albania have said they could build an offshoot from the planned South Stream gas pipeline to the Albanian port of Vlore. But analysts think Albania lacks promise as a potential transit country because of its internal political instability.

Albanian Prime Minister Sali Berisha said without elaborating that neighboring countries could build a branch from the South Stream gas pipeline to Vlore.

Berisha is reportedly on good terms with his Italian counterpart, Silvio Berlusconi, and welcomes Italian companies' involvement in Albanian energy projects.

South Stream is a joint project between Russian energy giant Gazprom and Italy's Eni estimated at 10 billion euros. It will deliver Russian natural gas to Europe through a route charted along the bed of the Black Sea, bypassing Ukraine.

Russia has signed intergovernmental agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria on the implementation of the onshore part of the project.

The European Union is considering a rival project, Nabucco, in order to reduce its dependence on Russian gas. However, Nabucco will not reach Albania or its closest neighbors, Serbia and Montenegro, or Macedonia and Greece.

Europe's main gas pipelines bypass Albania, even though it is favorably located between eastern and western Europe. It could get gas in 2012 from the proposed Trans Adriatic Pipeline (TAP), which will transport natural gas from the Caspian and Middle East regions via Greece, Albania, across the Adriatic Sea to Italy and on to Western Europe.

Albania is not vital to the South Stream project, said Alexander Kurdin, an analyst with the Institute for Energy and Finance think tank. It should import gas to ensure better economic development but has no future as a transit country because of its internal political instability. However, the pipeline could cross Albania to help ensure the diversification of gas supply routes.

Viktor Markov, chief analyst at the investment company Zerich Capital Management, said: "The EU's energy policy is based on a simple premise: The more pipelines, the better for consumers because competition between suppliers should push gas prices down."

Therefore, alternative gas pipelines and transportation routes will always be on the agenda.

"Given this policy, transit countries are likely to sign up to several projects simultaneously to make sure they get their fair share of the profits," Markov said.

Nezavisimaya Gazeta