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Nabucco pipeline capacity may be enhanced to 40 bcma

14 January 2009 13:11 (UTC +04:00)

Baku. Elmin Ibrahimov â€“ APA-Economics. In the wake of the recent flare-up between Russia and Ukraine, the plans for the Nabucco gas pipeline project will go ahead as scheduled, despite global economic turmoil, the projectâ€™s managing director has said.
At a breakfast meeting yesterday in Istanbul, officials from Nabucco, including Nabucco Pipeline International Managing Director Reinhard Mitschek and participating companies, such as OMV international spokesperson Christian Dolezal, explained the project’s vision as well as a number of the benefits that will be seen by participating countries.
Talking about the implications of the global crisis, Mitschek said while steel prices had gone down, reducing the cost of construction, the cost of financing had gone up, but the decrease in the steel prices had a much more important impact on the overall cost of the â‚¬7.9 billion project. He said the amount was calculated prior to the economic crisis and had not yet been revised.
According to him, the pipeline will take 15 billion cubic meters of gas a year at the initial stage with a gradual increase to 30 billion cubic meters.
He said investment in the implementation of the project will be made from 2010 after a final decision is reached in 2009.
Reinhard Mitschek stated that the capacity of the pipeline could be enhanced to 35-40 billion cubic meters a year through additional investment in 2016-2018, if need be.
Besides, the feasibility of pipeline is complete and it is much cheaper than Russian-initiated rival projects.
With respect to sources, Mitschek noted that there would be many to draw on. Unlike other pipelines, Nabucco will be able to receive sources from an eclectic mix of countries, including Azerbaijan, Turkmenistan, Iraq, Egypt, Iran and Russia. "We don’t want to exclude any gas source. We’re open to all," he stated.
According to the proposed agreements, the six countries involved in the construction of the pipeline -- Turkey, Bulgaria, Romania, Hungary, Germany and Austria -- will all share the benefits and risks of the project equally, each owning a 16.6 percent stake in the project. "Profits, costs and risks will all be shared" Mitschek said.
A summit, which will take place in Budapest from Jan. 26 to 27, bringing together the ministers and the heads of governments from Austria, Bulgaria, Germany, Hungary, Romania and Turkey, is expected to give a boost to the project.
The pipeline, which will be one-third financed by the owners, and two-thirds by banks, is meant to diversify and lessen Europeâ€™s dependence on Russian gas from 2013.
The project requires two million tonnes of steel, 200,000 pipes and more than 30 compressor units.
The pipeline consortium - Nabucco Gas Pipeline International Ltd. is equally owned (16.67% each) by Austriaâ€™s OMV, Hungaryâ€™s MOL, Turkeyâ€™s Botas, Bulgariaâ€™s Bulgargaz and Romaniaâ€™s Transgaz and Germanyâ€™s RWE.
Named after the Babylonian king in the eponymous opera by Italian composer Giuseppe Verdi, the pipeline will take 31 billion cubic meters of gas each year from the Middle East to Europe from 2012 at the earliest. It is likely to deliver the first gas to Europe in 2013.