(Corrects pipeline length in second para; removes reference to
$12 bln cost in para 8, fixes spelling of Baumgarten)
By Michael Kahn
PRAGUE Aug 14 The Nabucco pipeline, which aims
to reduce Europe's reliance on Russian gas, has moved a step
forward after Hungary became the first country to finish its
permitting process, the project's officials said on Tuesday.
The 1,300 km pipeline aims to bring Caspian gas supplies to
Europe to reduce dependence on Russian gas imports.
It will take a northern route from the Turkish-Bulgarian
border to Baumgarten in Austria and is competing with the
Trans-Adriatic Pipeline (TAP), which would take a southern route
into Italy. Nabucco would cross 384 kilometres of Hungarian
The project has received the last environmental permit for
Hungary it needs before construction can begin in the eastern
The approval marked a step forward for the scaled down
Nabucco West pipeline that Azerbaijan's Shah Deniz II consortium
- led by BP and Statoil - has shortlisted as the
route for Caspian gas.
"The granting of this permit is a substantial step forward
in Hungary and signifies the advanced stage of development of
Nabucco West," the project's managing director Reinhard Mitschek
said in a statement.
Preparations for the Nabucco project began in 2002 and a
final investment decision on whether the pipeline will go ahead
is expected this year or early in 2013.
If it does go ahead, the pipeline is expected to be
operational by 2017.
Some critics doubt the pipeline will be built due to the
high cost, large scale, competing projects and changing politics
in the countries it will cross.
So far, Nabucco's six shareholders are Austria's OMV AG
, Germany's RWE, Hungary's MOL,
Turkey's Botas, Bulgaria's BEH and Romania's Transgaz
have stood by the project.
As part of the project, the Shah Deniz II gas consortium
plans to ship 16 billion cubic metres of gas per year to Turkey
and the European Union.
Next year, Shah Deniz II is expected to decide on the entire
route for its gas and whether it wants the last stage of the
journey to take a southern route through Italy or a more
northern route into Austria.
BP operates the Shah Deniz II gas field, which is thought to
contain 1.2 trillion cubic metres of gas and the company holds a
25.5 percent stake, as does Statoil. The rest is divided between
Azerbaijan state oil company SOCAR, Russian LUKOIL,
Iran's NICO, Total SA and TPAO.
(Additional reporting by Henning Gloystein in London; Editing
by Nina Chestney and Alison Birrane)