‘Nabucco not cheap, needs to convince’
Baku, November 7, (AZERTAC). Europe`s planned Nabucco gas pipeline project is expensive and needs to convince wary investors that they should stump up the cash for it, EU Energy Commissioner Guenther Oettinger said on Friday, Reuters reports.
The European Union-backed plan to bring in up to 31 billion cubic metres of gas a year from the Caspian region has been plagued by delays and concerns about possible rising costs.
The Vienna-based pipeline consortium has estimated that Nabucco could cost around 7.9 billion euros ($10.9 billion) but has said this could change. It is scheduled to transport the first supplies in 2017 or 2018.
"Nabucco is not cheap, the cost factor is 10 billion euros or more," Oettinger told an energy conference in Vienna.
"Is the project bankable? Is there enough external financing?"
Asked later whether this meant Nabucco was too expensive to build, Oettinger said he thought the project could still go ahead.
"But you have to see that for a big project like Nabucco we need a European energy policy which enables investors to see that their investments make sense in the long term."
He said a coordinated industry effort was the way to ensure that banks are willing to put money into Nabucco.
"The debt crisis, which could develop into a financial market crisis or an economic crisis, is certainly no good sign," he said when asked if the state of the credit market could put financing for the project at risk.
"However, I still think that the project can still be assessed as being well-founded and that it therefore can be made bankable," he added.
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