Nabucco pipeline faces delay, rising costs

VIENNA: The EU's Nabucco gas pipeline will cost more than the estimated 7.9 billion euros ($10.7 billion) and will not start operations until the end of 2015, the head of the consortium building it said on Friday.

"We'll enter service at the end of 2015," the head of the Nabucco consortium Reinhart Mitschek told AFP.

Until now, the pipeline -- which will bring gas from central Asia to southeastern Europe -- had been slated to start operation at the end of 2014 or the start of 2015.

But with international tension surrounding Iran's controversial nuclear programme, the Nabucco consortium had decided to divert a planned stretch of the pipeline from the Islamic republic to Iraq instead, which was equally rich in gas, Mitschek explained.

"That will add a further 550 kilometres (342 miles), meaning it will measure 3,900 kilometres (2,420 miles) in total," he said.

While the changes have not been officially confirmed by the consortium, the estimated costs are likely to be revised upwards to reflect the increased length.

The Nabucco consortium is made up of OMV of Austria, MOL of Hungary, Romania's Transgaz, Bulgaria's Bulgargaz, BOTAS of Turkey and RWE of Germany and construction on the pipeline is scheduled to start at the end of this year.

But the companies involved have yet to secure much-needed supply agreements for the gas that Nabucco is to carry.

Potential supplier countries include Azerbaijan, Iraq, and also Russia, Mitschek said.