Nabucco Raises Investment Expectations
The Nabucco Consortium recently undertook a CAPEX update based on an actual market survey among major material and service supplies. They found that the high price of crude oil and rising demand for steel caused an increase of investment. Nabucco requires 2 mn tons of steel, 200,000 pipes and more than 30 compressor units. Nabucco´s competitiveness was unaffected since the high demand for energy will increase the profitability of energy projects.
International As a result of the decision of the running Steering Committee Meeting, Managing Director of Nabucco Gaspipeline, Reinhard Mitschek, said, "The Nabucco feasibility study, undertaken 2005, anticipated an investment requirement of about EUR 5 bn for the construction of the whole length of the Pipeline. 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".
As of today, project investment costs for Nabucco to build a 3,300 km long pipeline to carry 31bcm of natural gas are now expected to reach EUR 7.9 bn.
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, meaning that competitiveness and economics of the project will be unaffected. High demand for energy leads to higher gas prices and therefore to higher transportation fees, which make Nabucco considerably profitable.
Shortly, Nabucco Gaspipeline International GmbH will start a market sounding in preparation of the open season process. So far the market has shown big interest in the provided capacities. Nabucco Gaspipeline International GmbH has already signed various Letters of Interests with potential shippers.