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European Commission: Nabucco gas pipeline to provide EU with direct access to gas in Caspian region

Oil&Gas Materials 22 February 2011 22:55 (UTC +04:00)

Azerbaijan, Baku, Feb. 22 /Trend, V.Zhavoronkova/

Even in case of a rise in the cost of the Nabucco pipeline project, the European Commission will continue to support it, because its implementation will provide it with a direct access to the gas in the Caspian region, the EU representatives said.

"As a European Commission, we support the Nabucco as one of the projects of the Southern Corridor because it gives us a direct access to the gas in the Caspian region," Marlene Holzner, the European Commission energy spokesperson, told Trend in a telephone conversation from Brussels.

With regards to the economic efficiency of the pipeline, she said that the Nabucco is a private project by private companies.

"They have to calculate the costs and make the final decision to invest in this project and they also have to see if it is profitable or not," said Holzner.

Holzner said the European Commission will not participate in the negotiations process between project participants and financial institutions because it is a private project, and so the question of getting the money from the private sector and a private bank is for the companies to do.

European Investment bank, which is a public bank, has already in the past promised that part of the loan can come from the bank.

"So this part which comes from European bank is already there. In terms of the money that they need in private sector from private banks, this is something that they have to do," said Holzner.

The cost of the Nabucco gas pipeline project designed to transport gas from the Caspian region and the Middle East to the EU countries can be revised upwards, Reinhard Mitschek, Managing Director of NABUCCO Gas Pipeline International GmbH, told EU business earlier.
Mitschek said with international tension surrounding Iran's controversial nuclear programme, the Nabucco consortium had decided to divert a planned stretch of the pipeline from the Islamic republic to Iraq instead, which was equally rich in gas.

"That will add a further 550 kilometres (342 miles), meaning it will measure 3,900 kilometres (2,420 miles) in total," he said.

While the changes have not been officially confirmed by the consortium, the estimated costs (7.9 billion euros) are likely to be revised upwards to reflect the increased length.

In August 2010, the Nabucco shareholders agreed on a modification of the feeder line concept at a meeting in Ankara. Two feeder lines were approved and the respective engineering works were ordered. The feeder lines will run to the Turkish-Georgian and Turkish-Iraqi borders.

To date, the pipeline's estimated length stood at 3,300 km.

The construction of Nabucco pipeline will to start in 2012 and the first supplies is expected in 2015. The project's participants include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE.

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