Pipeliners

January 19, 2009 - AFX News Limited - The European Union has to provide financial support, at least capital guarantees to the Nabucco gas pipeline to get the project going, Zsolt Hernadi, Executive Chairman of oil and gas firm MOL said. "I am convinced that the EU has to provide at least capital side guarantees, it has to put some sort of funding into it," Hernadi told Reuters on the sidelines of a parliamentary committee hearing on Monday. "If there are guarantees, then all the cash the project needs can be raised but (the project) needs to be able to absorb capital side risks," said Hernadi, whose company is part of the Nabucco consortium. When asked how much funding would be desirable from the EU, Hernadi said: "As much as possible." The five-nation, $12 billion Nabucco could transport up to 30 billion cubic meters of gas a year from the Caspian region to Central Europe but it has been extensively delayed as planning issues, including financing, need to be ironed out. The Balkans region has been the hardest hit in the current gas debate between Russia and Ukraine as some countries lost all gas imports. The 3,300 kilometer Nabucco is held by MOL, Austria's OMV , Romania's Transgaz, Bulgaria's Bulgargaz, Turkey's Botas and Germany's RWE. "The EU, as far as I know, has not yet formulated an opinion on (providing financing) but I hope the Nabucco conference will give this a boost," Hernadi said. Hungary will host a conference on the Nabucco next week with European Commission President Jose Manuel Barroso and several EU prime ministers expected to attend. Speaking to the committee, Hernadi said the EU had been insensitive to the current Russian-Ukrainian gas dispute as most nations in the bloc were not affected. "This problem did not reach the threshold needed to get the attention of most members," Hernadi said. "This problem did not have an impact beyond Bavaria ... and the EU's first reaction indicated they did not consider this crisis to be very important." "But no matter what anybody says, the entire Balkans region was left without supplies and that carries political risk," Hernadi said.