VIENNA, March 2 (UPI) -- The six companies involved in the Nabucco pipeline consortium will have to arrange for $2.3 billion in guarantees for the project, a director said from Vienna.
Europe aims to break the Russian grip on the regional energy sector by moving non-Russian natural gas supplies through the planned Nabucco pipeline.
Directors said in February they might need to revise the $10.9 billion price tag if the project has to link to gas suppliers in Iraq. Financial estimates are expected later this year after consortium members examine potential connections to existing networks in the Middle East.
Stefan Judisch, the head of supply and trading at Germany energy company and Nabucco member RWE, told Bloomberg News the central issue to pipeline funding is what he described as a pre-completion guarantee.
"That will be $2.3 billion for each partner, according to current planning, because the shareholders will naturally have to guarantee the risk of construction completion," he was quoted as saying.
Nabucco spokesman Christian Dolezal, in an e-mail response to United Press International, said bank guarantees aren't the same thing as a payment.
"The necessary bank guarantees required from each of the Nabucco shareholders are not related to the actual amount of equity cash from each Shareholder at the final investment decision end 2011," he said. "Providing bank guarantees is not a payment but a routine process to obtain loan agreements -- be it in private financing or in big projects such as the Nabucco pipeline."
