Investors lured by the sound of Nabucco pipeline

BUDAPEST (Reuters) – The Nabucco pipeline, which will transport gas from Turkey to Austria and could reduce Europe’s dependency on Russian gas, is already signing up potential buyers before starting construction, the partners said yesterday. «The formal decision to start building the pipeline has not been made yet. You’ve got to check what the demand is before making this decision. The joint venture is negotiating contracts with potential buyers right now,» said a spokesman for Austrian energy company OMV AG, which is one of the partners. The pipeline, a venture between state-owned Turkish company Botas, OMV, Hungarian oil company MOL, Bulgaria’s Bulgargaz and Romania’s Transgaz is expected to begin operations in 2011. According to Vlad Pavlovschi, the head of the Transgaz management unit, the 3,300-kilometer (2,000-mile), 4.5-billion-euro ($5.35 billion) project will seek additional investors so as to improve its credit rating and thus make raising cash cheaper. Nabucco could bring gas supplies from Iran, Azerbaijan, Kazakhstan, Turkmenistan, Egypt and Syria, as well as from Turkey, via Bulgaria, Romania and Hungary to Austria. According to research from Bank Austria, Hungary, Austria, Romania and Slovakia are among the most vulnerable countries in Europe to disruptions to gas supplies through Ukraine. The Nabucco project is one of several under way to help ease dependency on Russian gas, whose supply to Europe was threatened on January 1 by its cutting supplies through Ukraine. Hungarian Prime Minister Ferenc Gyurcsany said yesterday that a project to ship liquified natural gas from the Adriatic could also help to diminish dependency on Russia. That project, which would involve constructing an LNG terminal on the Croatian island of Krk, has been under consideration since the 1990s. Another longstanding supply project is the Druzhba-Adria pipeline which would connect Russian oil fields with the Croatian deep-sea port of Omisalj on Krk, but that project has been stalled due to environmental concerns.

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