U.S. examines cost of Nabucco

BAKU, Azerbaijan, Jan. 20 (UPI) -- Costs associated with construction of the planned Nabucco natural gas pipeline for Europe are impediments to development, a U.S. envoy said.

Europe aims to break the Russian grip on the regional energy sector with gas transit networks included in the so-called Southern Corridor, which includes the much-lauded Nabucco pipeline.

Richard Morningstar, U.S. special envoy for Eurasian energy, said en route to Azerbaijan that costs tied to the $10 billion Nabucco pipeline could be problematic.

"It became clear that it is more difficult to implement the project from the financial and temporal points of view," he was quoted by the regional Trend news agency as saying.

He told the Interfax news agency in December, however, that Washington was a key supporter of the pipeline. Nabucco would be "preferable" but it must be commercially viable, he said.

Nabucco is up against the smaller Interconnector Turkey-Greece and the Trans Adriatic Pipeline projects included as part of the Southern Corridor.

Shareholder RWE said in a statement this week that its "fundamental approach" to Nabucco is unchanged but it would only contribute to projects with secured natural gas supplies and those that are "economically viable."