Signing of Nabucco gas pipeline agreement expected in June this year

PanARMENIAN.Net - The Nabucco gas pipeline consortium expects an intergovernmental agreement, needed to start up the project, by the end of June, the consortium's head said on Friday.



The planned 7.9 billion euros ($10.59 billion) pipeline, designed to ease Europe's dependence on Russian gas, needs an agreement between the governments whose countries it will cross, as well as an exemption from European Union antitrust rules.



The intergovernmental agreement had been expected in the first quarter of this year.



"We expect the signing of an intergovernmental agreement in June this year at the latest," a spokeswoman quoted consortium Managing Director Reinhard Mitschek as saying during a visit to Sofia.



Nabucco plans to pump gas from the Caspian region via Turkey, Bulgaria, Romania and Hungary to Austria through 3,300 km (2,051 miles) of pipelines from 2014. Central Asia and



The project case has been strengthened by the gas price row between Russia and transit country Ukraine in January, which left over a dozen European countries without gas for two weeks.



However, funding, sourcing of natural gas and lack of agreement between the Nabucco consortium members have plagued the project.



Nabucco's shareholders are Austria's OMV (OMVV.VI), Hungary's MOL MOLB.BU, Romania's Transgaz TGNM.BX, Bulgaria's Bulgargaz, Turkey's Botas and Germany's RWE (RWEG.DE).



Mitschek said shareholders and the European Bank for Reconstruction and Development would provide 30 and 25 percent, respectively, of the funding. "Middle East have 82 trillion cubic meters of gas, which fills us with optimism for effective use of Nabucco pipeline," Reuters cited Mitschek as saing.



Export credit agencies have also shown interest in providing funds for the project, Mitschek added.



In February, the World Bank said it was willing to give financial support to Nabucco if agreement over gas sourcing was reached between consortium members and supplying countries.



Mitschek has said lower steel prices may cause the consortium to revise the project's price lower.