Azernews.Az

The European Bank for Reconstruction and Development's (EBRD) due diligence process for Nabucco West gas pipeline project is ongoing, the bank spokesperson said.

"The next steps can be completed only once Nabucco West has been selected as preferred export route by the Shah Deniz II consortium," the source reported.

The spokesperson said the EBRD is considering providing debt financing and mobilising additional commercial bank lending, adding that the terms for providing credits are not yet agreed.

Nabucco West is a short-cut version of Nabucco project, which envisages construction of the pipeline from the Turkish-Bulgarian border to Austria. Gas to be produced within the second phase of Azerbaijani Shah Deniz gas condensate field development is considered as the main source for the project.

The project's current shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary's FGSZ.

In June, 2012 the consortium of Azerbaijani Shah Deniz gas field development chose Nabucco West as the single pipeline option for the potential export of Shah Deniz Stage 2 gas to Central Europe. The final decision on the pipeline route to transport Azerbaijani gas to Europe will be made in June, 2013.

According to the EBRD spokesperson, the Bank believes that the development of the Southern Gas Corridor, in which Nabucco West may be a key element, is of strategic importance to the European energy security.

The project's debt to equity ratio stands at 70:30, which means that Nabucco's shareholders will invest 30 percent of total cost of the project, and the rest 70 percent will be paid at the expense of loans.

According to the EBRD data, current cost estimates for Nabucco West stand at around 4.3 billion euros, of which the three international financial institutions (EBRD, EIB and IFC) are requested to contribute up to 1 billion euros.

The financing is targeted to be completed in 2014