June 8 (SeeNews) - Construction costs for the Nabucco gas pipeline will rise only marginally from the present official projection of 7.9 billion euro ($11.6 billion), Dow Jones reported.
The Nabucco Pipeline International project company, which will build and operate the facility, remains confident that it will secure enough gas to fill the pipeline designed to carry 31 billion cubic metres of Caspian gas to Europe per year, Dow Jones Newswires quoted the chief executive of RWE Supply & Trading Stefan Judisch as saying in an interview on Monday.
Germany's RWE is member of the Vienna-based Nabucco Pipeline International which also comprises the Bulgarian Energy Holding, Romania’s Transgaz, Hungary’s MOL, Turkey’s Botas and Austria’s OMV.
"What we can already say is that the costs will increase to reflect the fact that the pipeline is now planned to be longer because of the [new] feeder to Iraq," Judisch said in the interview.
The project is now expected to be more than 500 kilometers longer, making a total of 3,900 kilometers, after a feeder pipeline to Iraq will be added to the project. Iraq is expected to be one of the initial suppliers to the pipeline.
"But on a like-for-like basis--excluding the Iraqi feeder--the final construction costs will be marginally higher than our present estimate," he added.
Guenther Oettinger, the European Union's energy commissioner, said in early May that he expected Nabucco to cost between 12 billion euro and 15 billion euro.
Judisch said that an updated cost estimate will be provided once supply commitments with gas producers are agreed. So far, Nabucco has not reached a single supply agreement.
Talks with the consortium that is developing Shah Deniz II, the second development stage of Azerbaijan's giant offshore Shah Deniz gas field, are ongoing. Nabucco is also seeking to source gas from Turkmenistan and the Kurdish region in northern Iraq.
"Our critics are right when they say that Nabucco will not be economically viable if it is only half-filled," Dow Jones quoted Judisch as saying. "But we don't expect that Nabucco will be half-filled. There's enough gas in the Caspian region and the Middle East."
The partners in the Nabucco consortium and the governments of the five transit countries will sign project support agreements on Wednesday in Turkey.