July 13 (SeeNews) - Turkey and four European Union member states, all partners in the Nabucco gas pipeline project designed to carry Caspian gas to Europe, signed on Monday an intergovernmental deal on the project, the consortium that will build the pipeline said.
The Prime Ministers of the countries through which the pipeline will pass - Bulgaria, Romania, Hungary, Austria and Turkey - signed the deal in the Turkish capital Ankara, Agence France Presse reported earlier in the day. Germany is also a partner in the project but not a transit country.
"The pipeline now has a stable legal basis, and can guarantee gas transit under equal and transparent conditions for all customers," Reinhard Mitschek, managing director of the consortium Nabucco Pipeline International, said in a statement released after the signing ceremony.
The 3,300-kilometre Nabucco pipeline worth 7.9 billion euro ($11 billion) will start at the Georgian/Turkish and/or Iranian/Turkish border and will link the Caspian region, the Middle East and Egypt via Turkey, Bulgaria, Romania, Hungary with Austria and further west with Central and Western Europe.
The signing of the deal is expected to give a political boost to the project for the pipeline, which is scheduled to start delivering gas to Europe in 2014 or 2015. The project aims to reduce Europe’s reliance on Russian gas. However, the partners in the project have still not secured gas supplies and the project's financing.
"Nabucco will provide energy security to Turkey, to South East Europe, and to Central Europe. Nabucco is thus a truly European project," European Commission President Jose Manual Barroso, who attended the signing ceremony, said in a statement.
"The agreement will provide a stable legal framework for the next 50 years and it has now also been firmly agreed that 50% of the pipeline's capacity will be reserved for the shareholders and the remaining 50% offered to third-party shippers," the Nabucco consortium said.
Shareholders in the Nabucco Gas Pipeline International consortium that will build and operate the pipeline are Austria's OMV, Germany's RWE, Hungary's MOL, Turkey's Botas, Bulgaria's Bulgargaz and Romania's Transgaz.
Turkey had been delaying the signing of the deal demanding to use 15% of the pipeline’s capacity for own use or re-export.
The intergovernmental agreement lays down a standard tariff methodology. These conditions will apply for 25 years after the pipeline commences operation, and guarantee equal access for all market participants, the consortium said.
The Nabucco shareholders also agreed on the setting up of a political committee compising officials of the countries that signed the agreement which will contribute to the efficient implementation of the project. Germany, the European Commission, the European Investment Bank, the European Bank for Reconstruction and Development and the Nabucco Pipeline International will attend as observers.
"The next steps in taking forward Nabucco will include both the finalization of detailed technical planning as well as the social and environmental impact assessments. In parallel, the Nabucco consortium will start negotiations with banks and pursue the marketing of transport capacities in the open season process," the Nabucco consortium said.
Possible gas suppliers for the project include Iraq, Egypt, Iran, Azerbaijan, Russia and Turkmenistan.
Iraq has pledged to feed 15 billion cubic metres (bcm) of gas annually into Nabucco starting from 2014-2015, the Bulgarian government information service quoted Turkish Prime Minister Recep Tayyip Erdogan as telling his Bulgarian counterpart Sergei Stanishev on Monday. Iran too has offered guaranties for gas supplies, according to Erdogan.
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.
($ = 0.7173 euro)
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