Decision on Turkey-Austria gas pipeline due soon

Austrian oil and gas group OMV and Hungary’s MOL are two of the five firms proposing to build the 3,400-km pipeline from eastern Turkey to Austria. The consortium’s steering committee was due to meet in late February or early March and would probably decide whether to go ahead with the project then, according to Turkish pipeline officials.

The steering committee met in December but, rather than deciding at that time, it requested that its economic and financial studies, which deal with the project’s financial needs and financing, be merged. It also commissioned a ‘social impact study’, which was “important for the creditors.”

OMV and MOL’s partners in the venture are Turkey’s state pipeline company Botas, Romania’s Transgaz, and Bulgaria’s Bulgargaz, each of which has a 20% stake. In November, the consortium said “a whole portfolio” of suppliers could provide the pipeline with gas. In addition to Turkey’s current suppliers, Russia and Iran, Azerbaijan could deliver from 2006, it said. Other potential suppliers included Iraq, Syria, and Egypt and, if a pipeline were built through the Caspian Sea, Kazakhstan and Turkmenistan. Contracts with suppliers are due to be negotiated this year.

The pipeline would have an initial capacity of 4.5billion cum/yr and a final capacity of up to 30billion cum/yr. From Austria, the gas could be delivered via existing pipelines to France, Italy, Slovenia, and Croatia.

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