Energy ministers from Austria, Bulgaria, Hungary, Romania and Turkey agreed to pursue the 3,300-km Nabucco pipeline from Iran.
This will be one of four or five pipelines that will supply Europe in the next 20 years. Five companies – Austria’s OMV, Bulgaria’s Bulgargaz, Hungary’s MOL, Romania’s Transgaz and Turkey’s Botas – have formed a joint venture to manage this EUR 4.6 billion (USD 5.75 billion) project. The company leading the project is OMV from Austria.
A week earlier Hungary signed on to the Bluestream pipeline, after talks between MOL Hungarian Oil, Gazprom and the Hungarian government. The Bluestream gas pipeline will be extended through Turkey and Hungary, onto Austria. It is expected that these projects will increase Hungary’s gas security. The European Investment Bank will fund 30 per cent of Nabucco’s construction costs and the World Bank and European Bank declared that they are also ready to add financial support. This pipeline could reduce Southern and Eastern Europe’s dependency on Russian natural gas.
Construction of the 3,300-kilometer pipeline is expected to begin in 2008 and is planned to be finished until 2011. Once completed, it would allow transportation of natural gas from the Middle East and Caspian region to Europe. The western end of the pipeline will be Baumgarten an der March, a major natural gas hub in Austria and the transport capacity of the pipeline will be up to 30 billion cubic meters per year.
This project is included in the European Union’s Trans-European Energy Network program. It is expected that by 2025, 10-15 per cent of European Union’s gas will come from the Caspian region. The European Union will require an extra 200 to 300 billion cubic meters annually in 25 years time.
Hungary is interested also in the LNG pipeline from Croatia. It is expected that if Hungary will manage to import from different sources, this will have a good effect on prices.