Six Nabucco Pipeline Partners Each Asked To Post $2.3 Billion in Guarantees
The six companies planning the Nabucco pipeline to bring Caspian gas to Europe—RWE AG of Germany, OMV of Austria, Mol Nyrt of Hungary, Bulgargaz EAD of Bulgaria, Transgaz SA of Romania and Boru Hatlari ile Petrol Tasima AS of Turkey—will each need to arrange $2.3 billion in pre-completion guarantees for the project in addition to $559 million in equity, according to recent news reports.
The Nabucco pipeline will transport 31 billion cubic meters of gas from the Caspian basin to Austria.
Bulgaria announced on Jan. 21 that it will borrow $1.7 billion from the European Investment Bank for guarantees to the project.
A change in route into Iraq—necessitated by the current political situation in Iran—will add an additional 550 kilometers, bringing the pipeline’s total length to 3,900 km. This extension could result in an upward revision of the $10.8-billion cost estimate.
In a related development, Turkmenistan has started constructing a 320-km-long east-west gas pipeline to transport Turkmen gas toward the Caspian Sea, then to Azerbaijan through the Trans-Caspian pipeline across the Caspian seabed. Eventually, it will be connected to the Baku-Tbilisi-Erzurum gas pipeline and supply the Nabucco project, which aims to help cut Western Europe’s dependence on Russian gas.
