"The most important thing is that there be gas in the pipe"

It is the common interest of gas-importing Europeans and the gas exporters of the Caspian region that the Nabucco pipeline should break Gazprom's monopoly, according to Steven Mann, who has been tasked by the American government with persuading the various sides to work more closely together.

HVG: The American government lays great emphasis on building the Nabucco pipeline. It is clearly in central Europe's interest that we should be able to get gas from somewhere apart from Russia, including from central Asia. But why does it matter so much to the US?

S.M.: It's true that the US will never receive a single molecule of Caucasian gas. But the US government's long-term policy is to support the sovereignty, stability and independence of the new states of the Caspian region. In the 1990s, the region's leaders kept telling us that they did not feel secure because large parts of their economy depended on the monopolies of Transneft, which operates the Russian pipeline system, and Gazprom. We would like these countries to be able to use their gas assets for their own benefits. We also sense that our European allies' demand for gas is rising fast. So we are trying to help find a solution, bearing in mind the region's dependence on Gazprom, and hearing the fears that the governments of the region express in this connection. Fortunately, the Europeans have now also come together on this.

HVG: Mihaly Bayer, the Hungarian government's coordinator for Nabucco surprised members of parliament a few days ago by saying that of all the pipelines planned for Europe, Nabucco at the most advanced stage of development. Do you share this optimism?

S.M.: Indeed, whereas the consortium of companies behind Nabucco has already been set up, and while the feasibility studies are already being constructed, South Stream hasn't got this far. Gazprom can sign contracts easily enough, and it can announced dates, because they're not accountable to anybody, while the Nabucco consortium's members - Germany's RWE, Austria's OMV, Hungary's Mol, Romania's Transgaz, Bulgaria's Bulgargaz and Turkey's Botas - are responsible for what they say and do. The most important things is for there to be gas in the pipe. I was in Baku, the capital of Azerbaidzhan, recently, and in Ashabad in Turkmenistan, because these two countries will have a key role in supplying Nabucco with gas. Azerbaidzhan is already exporting gas to Turkey, and the president has made a solemn promise to export to Europe as well. The US is trying to encourage authorities in those countries to develop their production as fast as possible. I did the same in Turkmenistan, which has huge unexploited gas reserves. In Budapest, we are encouraging our Hungarian allies to build ever closer links with the two countries.

HVG: The International Energy Agency (IEA) has warned that if Russia does not invest far more in gas production than it does today, then from 2011 it will no longer be able to meet export demand - and four fifths of Hungary's gas consumption is met with imports from Russia. Couldn't the US do more to reduce this level of dependency?

S.M.: It is estimated that the OECD's European members will be consuming 250bn cubic metres more gas in 2015 than they are today, and there will be a shortfall in the international gas trade of around 218bn cubic metres. So we are calling for more gas production, for the second phase of Azerbaidzhan's Shah Deniz gas field to be started, for example. We asked the Azeri government to make it possible to extract gas from deeper strata, for example. Turkmenistan used not to let foreign energy companies operate in the country. The new Turkmen president has changed his position and set ambitious production aims. And Iraq could also eventually supply gas to Nabucco.

HVG: Gazprom, which is increasingly meeting its contractual obligations to western countries with Turkmen gas, promised Ashabad that it would raise prices to an undefined "European" level from 2009. Isn't this competition for Turkmen gas hitting European consumers' wallets?

S.M.: European consumers have to pay the market price, so competition between Russian and Turkmen gas will bring benefits. Competition will help Turkmenistan get the real price for its natural resources. In the 1990s, the Turkmens did once stop sending gas to Russia in order to extract a higher price from them - but they only succeeded in bringing their economy to the brink of collapse. They learned their lesson - for example that it is hard to enforce your rights if you sign a contract with Gazprom. The contract contains no dispute resolution provisions.

HVG: But is it realistic that Iraq will become a supplier of gas to Nabucco in the foreseeable future?

S.M.: Iraq's energy sector should soon become organised enough to allow foreign companies to start exploring for and extracting gas. Iraq will probably only be ready to export once the second phase of Nabucco starts, but Nabucco can start running before it reaches its full capacity of 30bn cubic metres.