Nabucco doesn’t expect costs to rise
Azerbaijan, Baku, Nov. 17 / Trend A.Badalova /
Nabucco Gas Pipeline International GmbH, operator of a planned 7.9 billion-euro ($11.8 billion) natural-gas pipe to Europe, said costs probably won't rise because they were set when materials prices were at record highs.
A higher bill for the project "isn't expected at all because when the cost was set about 1 or 1 1/2 years ago, we saw peak prices in commodity markets," Nabucco Managing Director Reinhard Mitschek said today in an interview in Budapest, Blomberg wrote.
The cost of steel plate, which is used to make large- diameter pipes, has slumped as the economic slowdown erodes demand. Prices have fallen 51 percent in Europe this year to 470 euros a metric ton, after reaching 950 euros in October 2008.
Nabucco gas pipeline project is worth €8 billion. Participants of the project are Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE companies. Each of participants has equal share to the amount of 16.67 percent. Construction of gas pipeline is planned to be launched in 2011, the first supplies - in 2014. Maximal capacity of the pipeline will hit 31 billion cubic meters per year. Nabucco Gas Pipeline International shareholders will invest 30 percent of total cost of the project, the rest 70 percent will be paid owing to loans.
About 70 percent of the funding for Nabucco will come from lenders, Mitschek said, adding that project partners planned to approach financial institutions and export credit agencies first. They will decide whether to involve commercial banks next year, he said.
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