New pipeline between ČR and Austria to cost CZK 2.5bn

Prague, Feb 26 (CTK) - The planned high-pressure gas pipeline Mozart, which should interconnect the gas networks of the Czech Republic and Austria, will cost between Kc2bn and Kc2.5bn, Ladislav Drab, the investor's representative and a board chairman of Ceske plynovody, a unit of CE Group, told journalists yesterday.

The main goal of the interconnection of both networks, which was the subject of talks between representatives of both countries' industry and trade ministries yesterday, is to ensure higher safety and reliability of natural gas supplies to both countries.

"Both countries are interested in such interconnection because conditions on both national gas markets have changed dramatically. Long-term contracts are not economically sensible and most deals are made on the spot market, which requires quick reaction. The new pipeline will support this, and it can eventually help push prices of natural gas for final consumers down," Drab said.

The construction of the pipeline could start immediately after relevant contracts between the parties involved and operators of national transmission networks are signed, and it could be completed within the years to come.

"It could be launched in the course of 2015. It is therefore a question of two or two and a half years," Drab said.

The planned pipeline should interconnect the Czech backbone gas pipeline with a pipeline run by the OMV group in Austria and subsequently with the European route of the southern gas corridor.

The new, 500-mm-wide pipeline should be nearly 100 km long, but the precise route has not been set yet. It should pass through a natural reserve in southern Bohemia. According to Drab, the Czech Environment Ministry has already issued a preliminary approval with it. The project has not, however, been authorised yet.

Another pipeline project, which is to link Baumgarten in Austria with Breclav in southern Moravia, is in a similar situation at present. Company Gas Connnect Austria, a subsidiary of OMV, is currently in talks about the construction of the 60-km-long pipeline with Czech gas pipeline operator Net4Gas.

According to Drab, only one of these two projects will finally be materialised. The decision on which one will be picked should be within six months, he said.