Nabucco Raises Investment Estimate to €7.9 Billion (May 29, 2008)

May 29, 2008 (Bloomberg, Romania Report)

May 29 -- Nabucco, the OMV AG-led pipeline that would link Western Europe to Central Asia, raised its estimate for construction costs by 58 percent to 7.9 billion euros ($12.3 billion) because of higher steel costs, Bloomberg reports.

"Steel is in high demand because of the large numbers of big projects and steel companies also capitalize on this high demand," Vienna-based Nabucco said in an e-mailed statement today. "Nabucco's competitiveness is unaffected since high demand for energy will increase the profitability of energy projects.''

The 3,300-kilometer (2,050-mile) pipeline, which is backed by the European Union, will bring gas from the Caspian region via Turkey to Austria and west Europe by 2013.

"High demand for energy leads to higher gas prices as well and therefore also to higher transportation fees which make Nabucco considerably profitable," Nabucco said in the statement.

The Nabucco group includes OMV; Mol Nyrt, based in Budapest; Essen, Germany-based RWE AG; Bulgargaz EAD in Sofia, Bulgaria; Medias, Romania-based Transgaz SA; and Ankara-based Botas. Nabucco requires about 2 million tons of steel, about 200,000 pipes and more than 30 compressor units.


Basescu: Romania supporter of Nabucco, PEOP projects

Earlier this month, energy officials from the European Commission, the Council of the European Union and from EU member states met in Bucharest for three days to talk about the block’s energy security and about environmental interdependencies within the Wilton Park Conference.

On May 14, the ‘911th Wilton Park’ conference opened in Bucharest (Romania), having as theme ‘Energy Security in the European Union: Environmental Interdependencies and the Black Sea Context’.

In his opening address Romanian President Traian Basescu told the participants that there has to be a single EU voice talking to third party energy suppliers and energy security in Europe depends on the way in which the Union commits itself to the regions of the Black and Caspian Seas.

The president stated that Romania’s priority is to strongly support the Nabucco and PEOP (Pan European Oil Pipeline from Constanta to Trieste) projects. ‘In our view, Nabucco natural gas pipeline is a priority of the European energy policy. (…) We also support the building of a LPG terminal in Constanta that may bring a notable contribution to the European energy security’ Traian Basescu stated in his address to the Wilton Park conference ‘Energy Security in the European Union: Environmental Interdependencies and the Black Sea Context’.



Bloomberg, Romania Report