February 5 (SeeNews) - Germany's power giant RWE on Tuesday became the sixth partner in the 5.0 billion euro ($7.3 billion) Nabucco gas pipeline project designed to carry Caspian gas to Central Europe via Turkey, the Nabucco consortium said.
The pipeline, planned to reduce European Union's reliance on Russian gas supplies, will be able to transit up to 31 billion cubic metres (bcm) of Caspian gas when completed. The 3,300-kilometre pipeline will start at the Georgian/Turkish and/or Iranian/Turkish border, respectively and will link the Caspian region, Middle East and Egypt via Turkey, Bulgaria, Romania, Hungary with Austria and further on with the Central and Western European gas markets.
"Nabucco Gas Pipeline International Ltd., an international consortium planning and constructing one of the most important European infrastructure projects for securing natural gas supply, announced today that RWE Gas Midstream [RWE's gas unit] had joined as the sixth strategic partner," the consortium said in a statement issued after all partners signed the relevant agreements in Vienna.
The other five shareholders in the consortium are Austria's OMV, Hungary's MOL, Bulgaria's Bulgargaz, Romania's Transgaz and Turkey's Botas. Each of the current six partners has a stake of 16.67% in the consortium.
"RWE Gas Midstream is an ideal strategic partner for the Nabucco Project. [...] With more than 10 million gas customers in South-Eastern, Central and North-Western Europe, RWE's production activities make it a reliable purchaser for the gas that in future will be transported via Nabucco," the consortium said.
Under the current timeframe, the first phase of the construction works on the pipeline will start in 2009 and will cover the route between Turkey's Ankara and Austria's Baumgarten. The first transport of gas will be made in 2012. The second construction phase will run from 2012 until end-2013 and will consist of the construction of the remaining section between the Turkish border to Georgia respectively Iran and Ankara.
"We are convinced that Nabucco will increase Europe's security of supply for natural gas," RWE Gas Midstream CEO Stefan Judisch said in the statement.
"The increased energy demand in Europe makes the development of additional gas wells necessary; the Nabucco pipeline creates the condition for this," the consortium's managing director Reinhard Mitschek said in the same statement.
Experts estimate that in the next 20 years Europe’s annual consumption of natural gas will increase from approximately 500 bcm to almost 800 bcm. For this reason the Nabucco project has been classified as one of the central infrastructure projects for strengthening Europe's security of supply for natural gas, the consortium said.
Some analysts see the Nabucco project as an alternative to the South Stream pipeline, a joint project of Russia's gas giant Gazprom and Italian oil and gas company Eni. The 10 billion euro South Stream project is designed to transport up to 30 billion cubic metres of Russian natural gas to Austria and Italy under the Black Sea and via Bulgaria and Serbia.
During a visit by Russian President Vladimir Putin to Sofia last month, Bulgaria signed an agreement with Russia to set up a 50/50 joint company that would build and manage the Bulgarian section of the South Stream gas pipeline.
Also in January, Serbia joined the South Stream project. Under a deal signed by Serbia's oil monopoly Srbija gas and Gazprom, the parties will set up a joint venture company for the construction and management of the Serbian section of the pipeline.
($ = 0.6836 euro)