Nabucco Pipeline starts technical planning while considerations for seventh partner remain
31 January 2008
After several delays, the gas pipeline project is expected to enter into initial constuction phase in 2009 amid civil society concerns over environmental and social impacts.
The Nabucco gas pipeline project is making important advances after a series of reported delays. The 5 billion Euro project is intended to help secure Europe from dependence on Russian oil by pumping 31 cubic billion meteres (cbm) of gas annually from the Caspian through Turkey, Bulgaria, Romania, Hungary and Austria for 3,300 kilometers. In January 2008, the consortium announced the appointment of a British company Penspen Group as the owner’s engineer for coordinating the detailed planning of the project. Pespen Group will also be responsible for a substantial part of the social and environmental impact evaluation work.
The project is expected to enter into initial construction phase in 2009, covering the route between Ankara and Baumgarten for 2,000 kilometers. In 2012, the second construction phase will finish the remaining section between the Turkish border with Georgia. Following the completion of construction, compression stations will be installed at key points to increase pipeline capacity.
The consortium, currently comprised of Austria’s OMV, Hungary’s MOL, Turkey’s Botas, Bulgaria’s Bulgargaz and Romania’s Transgas, is considering taking on a seventh partner following the imminent selection of a sixth, widely expected to be Germany’s RWE. "The shareholders are open for a seventh one if it will add value to the project," said the consortium's Managing Director Reinhard Mitschek. Like the current members of the consortium, the seventh partner would need to bring to the table access to gas supplies and a customer base, as well as sound finances.
Discussions of financing for the project are also underway. About 30% of the cost will be incurred by the consortium members themselves, another third from international financial institutions such as the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) and the rest from commercial banks. The EIB is committed to take a lead in financing, while the EBRD is currently in the negotiating stage.
BIC has expressed concerns about large pipeline projects like Nabucco because such projects generally have adverse environmental and social effects. It is essential that, if the international financial institutions (IFIs) provide financial support, the project must be built in accordance with the best international standards. In addition, the IFIs must require transparency for payments from the projects to host governments and for any agreements between the project operators and governments.
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