Azernews.Az

The investment costs on building the NABUCCO pipeline to take Caspian gas to European markets have been raised 50 per cent to 7.9 billion euros. The increase is due to rising world crude and steel prices, according to the NABUCCO project website.
"The NABUCCO feasibility study, undertaken 2005, anticipated an investment requirement of about 5 billion euros for the construction of the whole length of the pipeline," Managing Director of NABUCCO Gaspipeline International Reinhard Mitschek said after the decision was passed at the steering committee meeting last week. "Since then, crude oil prices have more than doubled - which consequently has also led to higher prices for all primary energy sources - also prices for steel. In addition, steel is in high demand because of the large numbers of big projects and steel companies also capitalize on this high demand".
The altered forecast is based on a market survey amongst major material and service supplies. Such investment increases are in line with all major infrastructure projects which require a high amount of raw materials as all are facing the same pricing challenges. However, the competitiveness and the economics of the project will be unaffected. High demand for energy leads to higher gas prices as well and therefore also to higher transportation fees which make NABUCCO considerably profitable.
The pipeline by-passing Russia is to pump gas from resource-rich Central Asia to Azerbaijan under the Caspian Sea, then to Georgia and Turkey and further to Europe. The pipe's annual throughput capacity is estimated at 31 billion cubic meters. Building the 3,300-km trans-Caspian conduit will take until 2011-2012, while transportation of first gas via the pipe is expected in 2013.