With memories of freezing houses, schools and offices still looming large, five countries will sign up to an ambitious pipeline project intended to break Russia’s grip on European gas supplies.

The Nabucco project, a 2,000-mile (3,300km) pipeline to pump gas from Azerbaijan to Europe via Turkey, has been given extra urgency by the ongoing payment dispute between Russia and Ukraine, which saw supplies to a dozen EU countries suspended in the depths of last winter.

Turkey, Bulgaria, Romania, Hungary and Austria will sign a transit agreement today to give Nabucco — which has hit investment problems during the recession — fresh impetus and increase credibility with suppliers.

The project has been dogged by fears that it could turn out an €8 billion (£6.8 billion) white elephant. Delays in securing start-up funding and political agreement mean that Nabucco will not be ready until 2015. Even then Russian efforts to buy up Azerbaijan’s reserves and the unpredictability of potential suppliers, including Iran and Turkmenistan, mean that there may not be enough gas to make the pipeline viable.

Furthermore, Russia is planning its own €10 billion Caucasus pipeline, called South Stream, to bypass Ukraine and deliver gas to southeastern Europe under the Black Sea, although it is still struggling to forge agreements with transit countries over the route and ownership rights.

Gazprom, the state-owned Russian company, has done a deal for 50 billion cubic metres of Azerbaijan’s gas but the EU believes that once Nabucco is built it will draw in supplies from Egypt, Iran, Iraq and Turkmenistan if there is not enough from Azerbaijan. “Major obstacles to Nabucco still stand, and supply is number one,” said Ana Jelenkovic, an analyst at Eurasia Group. “Without securing the supplies you cannot have the pipeline — but without the pipeline you cannot secure the supplies.”

Nabucco was conceived to diversify Europe’s gas supply after Russia turned off the taps during the winter of 2006 in a dispute with Ukraine, through which the gas flows.

With a capacity of 31 billion cubic metres a year it would supply only 5 to 10 per cent of EU demand, but it would break Russia’s monopoly over countries that have suffered the worst during the winter cut-offs, such as Bulgaria, Slovakia and Romania. In some cases schools and factories were closed as heating was severely rationed to conserve fuel; several countries, mostly in eastern Europe, reported a halt in Russian gas shipments while others — including Austria, France, Germany, Hungary and Poland — reported substantial drops in supplies.

The project is rich in geopolitical significance, not least because Russia is quick to use its huge energy reserves as a political tool. In May, Turkmenistan, Kazakhstan and Uzbekistan — all in Russia’s “backyard” — held off their support for Nabucco at a meeting in Prague. Azerbaijan signed an agreement in June to export gas to Russia from its Shakh Deniz reserve.

However, after a dispute with Russia which has seen Moscow halt gas imports, Turkmenistan said last week that it was now ready to provide gas for Nabucco. “Currently Turkmenistan has excess gas for trade. We are ready to send it abroad to any customer. This includes Nabucco,” President Berdymukhamedov said.

EU officials insist that there is enough gas from the Caucasus region to supply both Nabucco and South Stream, which they see as Russia’s attempt to escape reliance on the Ukrainian transit routes.

“A lot of fanfare was made about the deal for 500 million cubic meters of gas between Azerbaijan and Russia, but that is one sixtieth of the size of Nabucco. It is a very small deal,” said a European Commission gas expert.

“Our strategic aim is to reach new sources of gas, and for every deal in gas and oil you get agreement on the pipeline first. Even Russia does it that way around.”

José Manuel Barroso, the European Commission President, said: “The Nabucco project is of crucial importance for Europe’s energy security and its policy of diversification of gas supplies and transport routes.”

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