BP doubles Nabucco construction expenses

BP has doubled the evaluation of prices for the Nabucco gas pipeline
to 14 billion euros, due to rising prices for raw construction
materials, especially iron ore, RIA Novosti cites The Guardian.

The Nabucco project is aimed at transporting natural gas from the
Caspian region to European states, by-passing Russia through
Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania and Austria.

The pipeline will transport 31 billion cubic meters of gas annually,
fulfilling over 5% of the EU demand for gas in 2020. Construction is
expected to start in 2012. The first gas supplies will start in 2015.
OMV (Austria), MOL (Hungary), Bulgargaz (Bulgaria), Transgaz
(Romania), Botas (Turkey) and RWE (Germany) each have a 16.67% share.
The consortium operating at Shakh-Deniz expects to use Nabucco and
other gas pipelines to transport Azerbaijani gas to Europe.

The European Commission supports the Nabucco project as a way to
reduce dependence on Russian gas. However, it is hard to launch and
finance the project on the gas market, a Deloitte analyst Graham
Sadler said.

Nabucco's competitors are ITGI and TAP. ITGI is worth 2.5 billion
euros and will transport Caspian gas along the Turkey-Greece-Italy
route. TAP is worth 1.1 billion euros and will be 520 km long. It will
transport gas to South-East Italy through Greece and Albania. Nabucco
involves construction of infrastructure, TAP and ITGI need to update
already existing ones.

TAP and ITGI will also be slightly affected by the rising prices for steel.