PanARMENIAN.Net

Signing of Nabucco gas pipeline agreement expected in June this year
28.03.2009 19:09 GMT+04:00

/PanARMENIAN.Net/ The Nabucco gas pipeline consortium expects an
intergovernmental agreement, needed to start up the project, by the
end of June, the consortium’s head said on Friday.

The planned 7.9 billion euros ($10.59 billion) pipeline, designed to
ease Europe’s dependence on Russian gas, needs an agreement between
the governments whose countries it will cross, as well as an exemption
from European Union antitrust rules.

The intergovernmental agreement had been expected in the first quarter
of this year.

"We expect the signing of an intergovernmental agreement in June this
year at the latest," a spokeswoman quoted consortium Managing Director
Reinhard Mitschek as saying during a visit to Sofia.

Nabucco plans to pump gas from the Caspian region via Turkey,
Bulgaria, Romania and Hungary to Austria through 3,300 km (2,051
miles) of pipelines from 2014. Central Asia and

The project case has been strengthened by the gas price row between
Russia and transit country Ukraine in January, which left over a dozen
European countries without gas for two weeks.

However, funding, sourcing of natural gas and lack of agreement
between the Nabucco consortium members have plagued the project.

Nabucco’s shareholders are Austria’s OMV (OMVV.VI), Hungary’s MOL
MOLB.BU, Romania’s Transgaz TGNM.BX, Bulgaria’s Bulgargaz, Turkey’s
Botas and Germany’s RWE (RWEG.DE).

Mitschek said shareholders and the European Bank for Reconstruction
and Development would provide 30 and 25 percent, respectively, of the
funding. `Middle East have 82 trillion cubic meters of gas, which
fills us with optimism for effective use of Nabucco pipeline,’ Reuters
cited Mitschek as saing.

Export credit agencies have also shown interest in providing funds for
the project, Mitschek added.

In February, the World Bank said it was willing to give financial
support to Nabucco if agreement over gas sourcing was reached between
consortium members and supplying countries.

Mitschek has said lower steel prices may cause the consortium to
revise the project’s price lower.