A summit meeting discussing the Nabucco gas pipeline project will be hosted by Budapest, Hungary, January 26-28, to be attended by Government officials from the five countries involved in the project and officials of the six companies carrying out the project in a consortium.

The main topics on the agenda regard the signing of an intergovernmental agreement on the project and drawing up a concrete calendar for the beginning of works on the pipeline. The gas sources for the pipeline are a delicate issue that is also expected to be tackled at the summit.

This will be the first energy summit meeting after Russian gas deliveries to Europe halted for almost two weeks this month because of a row between Russia and Ukraine. Europe imports one quarter of its gas from Russia, and 80 percent of the deliveries are made through pipelines that cross Ukraine.

In an interview to Bloomberg on Friday, Managing Director Reinhard Mitschek of Nabucco Gas Pipeline International GmbH, Nabucco Gas Pipeline International GmbH (the project consortium owned by Austria's largest oil and gas company OMV AG, Budapest-based Mol Nyrt, Germany's RWE AG, Bulgaria's Bulgargaz EAD, Romania's Transgaz SA and Ankara-based Botas ) will tender construction orders at the end of this year or early in 2010 for the project, planned to carry gas from the Caspian Sea region to Europe in 2013

According to Mitschek, Nabucco Gas Pipeline International GmbH expects commitments from the pipeline's customers and suppliers by the end of 2010.

Conceived as an alternative to the Russian natural gas, Nabucco would provide the European Union with alternative gas supplies from Azerbaijan, Iran, Iraq, Turkmenistan and Kazakhstan.

The pipeline concerns natural gas transmission from the Caspian Sea to Europe, via Turkey, Bulgaria, Romania, Hungary and Austria. The pipeline would be 3,300 km long and would carry nearly 31 billion cubic metres of gas a year.

The latest cost estimates put the Nabucco pipeline at 7.9 billion euros, higher than the initial estimates of 4.4 billion euros. In an interview to Bloomberg in December 2008, Reinhard Mitschek estimated that falling steel and commodity prices could also reduce the construction costs of the pipeline.

'Prices for steel, scrap and tubes are coming down and that overcompensates for possible higher interest payments... We will revise the necessary investments next year, and there may be a positive surprise,' said Mitschek.

Nabucco requires about 2 million tons of steel, about 200,000 pipes and more than 30 compressor units. The venture's partners are currently holding talks with lenders to arrange financing. They plan to negotiate detailed loan agreements with banks and government-backed lenders in the second half of 2009, according to Mitschek. The six partners each plan to invest 400 million euros, while commercial banks will lend about 1 billion euros for the project, Mitschek added back in December.

According to an earlier report of the government press office, among the participants in the Budapest meeting of heads of state and government were expected to be President Ilham Aliyev of Azerbaijan, Hungarian Prime Minister Ferenc Gyurcsany in his capacity as host, Prime Ministers Mirek Topolanek of the Czech Republic, Nuri al-Maliki of Iraq and Grigol Mgalobishvili of Georgia, Austrian Economics and Labour Minister Reinhold Mitterlehner, Turkish Energy and Natural Resources Minister Mehmet Hilmi Guler, Egyptian Petroleum Minister Sameh Fahmy, senior officials of Kazakhstan, Turkmenistan and the US, European Investment Bank President Philippe Maystadt, European Bank for Reconstruction and Development President Thomas Mirow, and Nabucco Gas Pipeline International GmbH Managing Director Reinhard Mitschek.