Pipeliners

February 04, 2009 - Reuters, AFX News Limited by Orhan Coskun - The Nabucco gas pipeline consortium may review its 7.9 billion euro ($10.3 billion) investment plan this year given the fall in steel prices, its Managing Director Reinhard Mitschek said on Wednesday. The pipeline could begin in Georgia and Iran or in Ankara and the consortium would consider both alternatives positively, Mitschek told reporters in the Turkish capital of Ankara. The project would carry Caspian gas 3,300 km (2,051 miles) across Turkey, Bulgaria, Romania and Hungary to an Austrian distribution hub. It is designed to diversify gas supplies to Europe by reducing dependence on Russian gas. So far it has received scant financial commitment, and it has only a fifth of the gas commitments needed to make it viable. Mitschek said the latest revisions to the cost of the pipeline were made when steel prices were at a peak. "But there has been an important drop in steel prices since then. We can revise the price of the pipeline lower in one of our meetings this year," Mitschek told a group of journalists. But the revision may come after steel prices stabilize, he added. The European Commission said last week 250 million euros would be contributed to the European Investment Bank towards funding the pipeline. Nabucco's shareholders are Austria's OMV, Hungary's MOL, Romania's Transgaz, Bulgaria's Bulgargaz, Turkey's Botas and Germany's RWE . Ahirboz, outside Ankara, had been considered for the start of the pipeline, but Mitschek said the Nabucco consortium was looking at Ankara as an option for the start of the pipeline as well as at the borders of Georgia and Iran. "We are open to both possibilities. The most important thing is feasibility," Mitschek said. A Turkish Energy Ministry source told Reuters last year that Ankara and the European Union had agreed the pipeline would start at a site near Ankara. But analysts say Ankara has frustrated the consortium by asking for a share of the gas to flow through the line in exchange for using Turkey as a starting point for the project, which has forced Nabucco partners to consider other options.