Bloomberg News

Romanian Nabucco Section to See EU1.5 Billion Investment

November 23, 2011

(Updates with comments from in third paragraph.)

Nov. 23 (Bloomberg) -- The Romanian section of the Nabucco pipeline will probably require between 1.2 billion euros ($1.6 billion) and 1.5 billion euros in investments, the project’s Managing Director Reinhard Mitschek said.

Nabucco Gas Pipeline International GmbH expects to make a final investment decision about the pipeline early in 2013 and start construction later that year, Mitschek reiterated today at a presentation in Bucharest, Romania.

Nabucco officials plan to complete an environmental assessment of the project in 2012 as minor rerouting is still possible depending on the findings, Mitschek said.

“The Nabucco section in Romania will have 470 kilometers, we plan to construct here compressor stations, pipeline, and even now with the engineering phase we contract with the local suppliers for the preparation of the construction,” Mitschek said. “We will also contract logistics infrastructure companies here in the country and then of course for the construction we’ll invest about 1.2 billion euros to 1.5 billion euros on the territory of Romania.”

The pipeline, estimated to cost 7.9 billion euros, is planned to carry gas more than 3,900 kilometers (2,425 miles) from Turkey to Austria to cut Europe’s dependence on Russia. The venture on Sept. 6, 2010, said it may get 4 billion euros in loans from the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank.

Nabucco may start the so-called “open season” at the end of the first quarter of next year as it expects a positive decision from Shah Deniz gas-suppliers before that, he said.

The total value of the project might change once a new study is completed after the project changed its route to include a new feeder line to Iraq.

“I’ll be able to give you a new estimate once we’ll finalize the engineering works and we will have the first results of the open season because the investment will depend on the number of feeder lines,” Mitschek said. “This fine tuning takes place between now and the first part of 2012 and then I can give you a reliable figure.”

A meeting with the Shah Deniz venture will take place tomorrow in Vienna and Nabucco expects Shah Deniz to make a decision on its participation by the end of the year, according to Mitschek.

--With assistance from Andra Timu in Bucharest. Editor: Zoe Schneeweiss

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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