Nabucco Tie-in Starts Detailed Talks with Intl Lenders on 7.9 Bln Euro Gas Pipeline

"Nabucco has started detailed discussions with the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) and will soon also enter into a dialogue also with the International Finance Corporation (IFC)," Reinhard Mitschek, managing director of Nabucco Gas Pipeline International, the outfit that will build the pipeline, said in a statement.

"We expect that next year the scope of involvement of the individual lenders will become clear," Mitschek said.

The early engagement of lenders is an important success factor for the realisation of the project and for this purpose, Nabucco has contacted a number of export credit agencies in Europe, the U.S. and Japan many of which are expected to support the project by means of loan covers and guarantees. The consortium members will provide equity for the project as well, the statement said.

The next steps in taking the Nabucco project forward will include both the finalisation of agreements, like the Project Support Agreement, with detailed technical planning and social and environmental impact assessments, the consortium added.

Shareholders in the consortium that will build and operate the 3,300-kilometre pipeline are Austria's OMV, Germany's RWE, Hungary's MOL, Turkey's Botas, Bulgaria's Bulgargaz and Romania's Transgaz. The planned capacity of the pipeline is 31 billion cubic meters (bcm). First deliveries are expected in 2014 or 2015.

The EU-backed Nabucco is considered as rival to the 10 billion euro South Stream gas pipeline, a joint project of Russia's Gazprom and Italy's ENI, designed to carry 63 bcm of Russian gas yearly to Austria and Italy under the Black Sea and via Bulgarian territory.

($ = 0.6673 euro)