Frequently Asked Questions

Nabucco is the new gas bridge from Asia to Europe. It will connect the world's richest gas regions - the Caspian region, Middle East and Egypt, to the European consumer markets. The pipeline will link the Eastern border of Turkey, to Baumgarten in Austria - one of the most important gas turntables in Central Europe - via Bulgaria, Romania and Hungary.

According to estimates from the International Energy Agency, demand for natural gas will rise from the current level of 500 billion bcm (in 2010) to 620 billion bcm in 2030. Simultaneously, European production is decreasing rapidly. The natural gas fields off coast of England for example supplied about 110 billion bcm in 2000. By 2020 only 10 billion bcm will be supplied. Eurogas estimates that European production – currently 60% of European demand – will cover only 25% of demand by 2030. In 20 years’ time, Europe must expect an import gap of about 150 billion bcm a year. The Caspian region and the Middle East have sufficient gas reserves, however the challenge is the transportation of this natural gas to the end user. Nabucco offers a solution and will connect the rapidly expanding Turkish energy market with Europe, via Bulgaria, Romania, Hungary and Austria. Nabucco will open a gas corridor that will create more competition and will contribute significantly to the diversification of gas sources.

Construction will start end of 2013, with the first gas flowing end of 2017. The main pipeline will be built in one phase from the Eastern border of Turkey - across Bulgaria, Romania and Hungary- to Baumgarten in Austria and will be completed in 2017.

No, Nabucco Gas Pipeline International Ltd. (NIC) is a company which has been set up to develop, establish and construct the Pipeline. The gas will be delivered by shippers, who will buy transport capacities. NIC will negotiate supply contracts with various shippers and therefore decide where the gas comes from.
 

As domestic production of gas is decreasing dramatically all over Europe, in order to meet future demand, new infrastructure sources have to be established with the European gas markets. In this respect, the Caspian Region and Middle East with their vast gas reserves - as well as Egypt - will play a crucial role both in terms of diversification of supply as well as security of supply for Europe. The opening up of a fourth main supply corridor is the only solution to meeting all of Europe's future gas demands. Consequently this route offers a wide range of supply sources for the Nabucco gas pipeline, receiving gas from the Caspian Region like Azerbaijan, Turkmenistan, the Middle East, Iraq or Egypt.
 

Natural gas is climate friendly. Independent Studies show that substituting coal with natural gas would reduce CO2 emissions for 40%.

Shippers will book capacity with NIC, on a long term ship-or-pay basis, for the transport of gas using the Nabucco Pipeline. NIC will operate a one-stop-shop and collect payments from shippers. To make it simple: We'll render transport services. Long term means 15 to 20 years. Ship-or-pay means that the tariffs will have to be paid for reserved capacity on a firm basis irrespective of the factual use of the capacity day-by-day.

NIC will not negotiate with either producers or consumers. It would be the responsibility of shippers to decide where to buy and sell the gas. The existence of the pipeline infrastructure will make such deals possible.  Almost any company in the chain of natural gas trade can act as a shipper. The exception is NIC as it is subject to EU unbundling regulations. NIC will act as a pure Transmission System Operator (TSO). However, under EU rules, a temporary exemption may be allowed as an incentive. The Nabucco shareholders have been granted such as an exemption and can therefore use 50 percent of the pipeline's capacity. This exemption has been granted for 25 years.
 

• To open a new gas supply corridor for Europe and for the countries involved in the project, delivering very cost-effective gas sources
• To raise the transit profile of the participating countries along the route
• To contribute to the security of supply for all partner countries, and also for Europe as a whole
• To strengthen the role of the gas pipeline grids of all the Nabucco partners by enabling them to connect with the European gas network
   

Bulgarian Energy Holding (Bulgaria), Botas (Turkey), FGSZ (Hungary), OMV (Austria), RWE (Germany), Transgaz (Romania). Each shareholder holds an equal share of 16.67% of Nabucco Gas Pipeline International GmbH.

Nabucco is open to establishing further partnerships, should they strengthen the project.
 

• Total length:     3,900 km
• Turkey:             2,581 km  [including all feeder lines]
• Bulgaria:         412 km
• Romania:        469 km
• Hungary:         382 km
• Austria:           47 km
   

Max.capacity: 31 bcm/ year
Operating pressure: PN 100 bar
Number of pipes: 250,000 (~ 2 million tons of steel)
 

"Open Season" is the name of a tender procedure and contains two steps. In the first step, the offer is addressed to the shareholders and associated companies for an amount up to 15 bcm – 50 percent of Nabucco's maximum transport capacity. In the second step, Nabucco will offer the remaining 50 percent to external companies ("third party access"), offering them the same conditions and transparency. In this procedure all market participants will have the possibility of securing long-term contracts. The entire "Open Season" process will last around six months. The Open Season Process is expected to start during the course of 2011.
 

The Intergovernmental Agreement was signed in Ankara on 13 July 2009 and ratified by all National Parliaments by March 2010. It marks an important milestone in the development of Nabucco as it is a political agreement between the governments of the Nabucco transit countries - Austria, Hungary, Romania, Bulgaria and Turkey, which harmonises the legal framework and grants stable and equal transport conditions for all partners and customers.

The PSAs are bilateral, legal agreements specific to and between the Nabucco Companies and the government of each transit country. They represent a significant step in the advanced development stage of the Nabucco Pipeline. The main elements of the PSAs are the affirmation of an advantageous regulatory transit regime under EU and Turkish energy law; the protection of the Nabucco Pipeline from potential discriminatory changes in the law; and support for legislative and administrative actions for the further implementation of the project. The PSAs also mark a commitment by each government to support the project. Together with the Intergovernmental Agreement, the PSAs are a necessary prerequisite for the successful financing of the project. They create the stable, long-term regulatory regime, which is required by the group of international lenders to secure the financing of one of the largest single gas transmission projects worldwide.

The current investment  figure of EUR 7.9 billion for the Nabucco construction is based on the technical feasibility study. We are currently reviewing our calculations of the Capex Figure in order to better reflect a number of recent developments in the market and adjustments to the technical and commercial parameters needed to accommodate these changes. The results of this review will be available in the upcoming month's.

In order to finance the project, NIC will raise funds from shareholders, international development banks, export credit agencies and the commercial banking market in accordance with internationally recognised social and environmental standards. 30% of the investment will be funded by the shareholder consortium, 70% by lenders. NIC will try to obtain up to a third of the funding required from international financial institutions such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

A comprehensive Environmental and Social Impact Assessment will be conducted to highlight any adverse impact the construction of the pipeline might have on the environment. Following this, the Nabucco project team will put any necessary control and mitigation measures into place in order to minimise the impact of construction.

Recent Greenpeace studies show once more that natural gas is a sustainable bridge energy source: Climate friendly, flexible and available. Natural gas is the partner of renewable energies and its use manifold. Micro-Gas turbines, Motor-BHKW and the perspective of fuel cells demonstrate the advantage and the efficient usage of natural gas in climate friendly technologies. Also Biogas could be inducted into gas infrastructure network in principle. Wind power plants and solar energy can be combined with natural gas. That’s why natural gas networks need to be enhanced.

For more information on natural gas as a sustainable bridge energy source please see:
www.greenpeace.de