First Nabucco Gas Will Likely Come From Iraq

VIENNA — The first gas, most likely from Iraq, will flow through the Nabucco pipeline in the fourth quarter of 2014, the consortium confirmed Thursday and said it hopes for further supply from Azerbaijan in 2015 or 2016.

Energy analysts have questioned the plan to transport up to 31 billion cubic meters of gas a year from the Caspian region to an Austrian gas hub via Bulgaria, Romania and Hungary because Nabucco has lacked solid supply agreements.

The pipeline, which should lessen Europe’s dependence on Russian gas, also faces rivalry from a similar project launched by Gazprom.

But the head of the consortium sounded a positive note Thursday. “We believe that we will start up in 2014 and that the gas will be ready from Iraq,” managing director Reinhard Mitschek told reporters in a briefing.

He said the focus had shifted to Iraq from Azerbaijan to supply the first gas because discussions had progressed more there.

The first full year of gas deliveries will be 2015, when the consortium expects some 8 billion cubic meters of gas to be pumped from Iraq’s Kurdistan, Mitschek said.

“During 2015, 2016, we should have a further 8 billion from Azerbaijan,” Mitschek said. This would give a total of about 16 billion cubic meters by 2016. More gas would then come from Iraq, Azerbaijan and Turkmenistan, he added.

The open-season process should begin in the first half of 2010 and last four to six months, Mitschek said.

Nabucco could cost less than the 7.9 billion euros ($11.5 billion) expected because steel prices have come down, he said.

But he added that the consortium was unwilling to give a new budget until it had made some of its first big construction orders. By the end of the year, about 40 million euros will have been invested in the project since its conception.

The pipeline project took two big steps earlier this year. In May a bloc of European and Arab energy firms announced plans to pump gas from the semiautonomous Kurdistan region of Iraq to kick-start Nabucco.

European Union countries and Turkey signed a transit deal for the pipeline in July. Europe imports a quarter of its gas from Russia and has backed Nabucco to help cut that dependence.

“We do not rule out any source,” Mitschek said, when asked if Russia could be a potential supplier in the future.

Nabucco shareholders are Austria’s OMV, Hungary’s MOL, Romania’s Transgaz, Bulgaria’s Bulgargaz, Turkey’s Botas and Germany’s RWE.