Turkey expects 60 pct of Nabucco tax revenues

(ANKARA) - Turkey expects to receive 60 percent of tax revenues from Europe's flagship Nabucco gas pipeline under a key agreement to be signed next week on the planned project, a foreign ministry official said Friday.

The distribution of tax revenues is one of the issues addressed in the intergovernmental agreement that Turkey, Austria, Bulgaria, Hungary and Romania -- the transit countries that the pipeline will cross -- will ink Monday in Ankara, the official said on condition of anonymity.

"The agreement contains the principle that tax revenues will be distributed according to the length of the pipeline passing through each country," the official said.

Since Turkey will have nearly 2,000 (1,240 miles) of the 3,300 kilometers of the pipeline on its territory, it will receive 60 percent of the tax reveunes a year, or about 400 to 450 million euros (558 million dollars to 628 million dollars), the official added.

Designed to reduce European independence on Russian gas, Nabucco is expected to pump as much as 31 billion cubic metres of gas from the Caspian Sea to Austria via Turkey and the Balkans, bypassing Russia.

The pipeline is expected to be operational in 2014 and estimated to cost 7.9 billion euros (10.9 billion dollars).

In January, the European Investment bank said it was prepared to finance up to 25 percent of the project cost if there was a secure intergovernmental agreement in place.

The European Bank for Reconstruction and Development has also expressed willigness to provide financing once it sees gas supply contracts, completion agreements and technical parameters.

The Nabucco project, however, has been plagued by a lack of gas suppliers.

In May, key suppliers Turkmenistan, Kazakhstan and Uzbekistan held off their support to the pipeline at a meeting in Prague, while Azerbaijan, another gas-rich Caspian country, signed an agreement in June to export gas to Russia, raising concerns among Nabocco proponents.

"Monday's agreement will serve to boost credibility in the Nabucco project and will lead gas suppliers to think seriously about the pipeline," the Turkish official said.