* EIB willing to contribute to Nabucco financing
* EIB expects to be asked for up to 2 bln euro
By Melis Senerdem
ISTANBUL, Feb 4 The Nabucco consortium has
approached the European Investment Bank and may seek up to 2
billion euros financing to build its natural gas pipeline, said
EIB Vice-President Mathias Kollatz-Ahnen.
But the partners will have to pass legislation that approves
the pipeline's transit in their home countries before the bank
would be willing to sign off on such a loan, he said.
Of the five transit countries Bulgaria, Hungary and Austria
have ratified the agreements for the 7.9 billion euro European
Union-backed pipeline, conceived to cut dependence on Russian
gas, which makes up nearly a quarter of European consumption.
Partners in the 31 billion cubic metre capacity pipeline
include Austria's OMV (OMVV.VI), Hungary's MOL MOLB.BU,
Germany's RWE (RWEG.DE), Bulgaria's Bulgargaz, Romania's Trangas
TGNM.BX and Turkey's Botas.
"The EIB, together with other (international financing
institutions) have already been approached for the debt
financing. Promoters could be seeking a substantial (portion) in
between 20 or 25 percent of the project cost from the EIB. The
bank is willing to contribute to the financing of this important
project", Kollatz-Ahnen said in an email.
International finance institutions have said they were
willing to finance the project if the pipeline consortium was
able to secure gas for the line, seen meeting five percent of
Kollatz-Ahnen said he expected the Nabucco Consortium to
finance 30 percent of the pipeline itself.
Finding gas for the pipeline has remained the largest
problem for Nabucco. Supplies from Iraq, Azerbaijan and
Turkmenistan have been considered, though no secure supply
agreements have been drawn up, leaving the pipeline vulnerable
A Kremlin-backed South Stream pipeline, which has ready
reserves, is competing with Nabucco in order to keep a hold on
Russia's share of the European gas market.
The Vienna-based Nabucco consortium aims to finalize
investment decision of the project by the end of 2010 following
an open season process, which will allow companies to bid on
The process will be a crucial indicator of demand for the
pipeline. Last week Werner Auli, head of oil and gas, said the
pipeline will not be built if demand is not there.
Analysts have said there may not be enough demand for
traditional gas supplies in Europe to make both pipelines
(Writing by Melis Senerdem and Thomas Grove)