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Budapest - The European Commission (EC) pledged on Wednesday to provide EUR 250 mln direct support for the planned Nabucco gas import pipeline, which is designed to diversify European gas imports by carrying Central Asian gas via a Balkans route bypassing Ukraine.

"The EC today decided to propose EUR 250 mln to support Nabucco," Hungary's Transport, Telecommunications and Energy Minister Csaba Molnar told reporters Wednesday. "Yesterday's international conference on Nabucco in Budapest has already brought tangible results [...] an important decision that can help the project move forward."

On Tuesday Hungary's Prime Minister Ferenc Gyurcsany, in agreement with other Nabucco participants, called on the EU to provide EUR 200-300 mln in upfront support for Nabucco. Of Nabucco's eventual EUR 7.9 bln price tag, some EUR 2 bln should come from EU sources over the longer term, according to Gyurcsany.

According to current plans, Nabucco would transit gas from Central Asian sources such as Azerbaijan via Turkey, Bulgaria, Romania, Hungary and Austria, over a 3,300-kilometer pipeline that would be operational as early as 2014. Participant countries are currently in the process of drafting an intergovernmental pact, a process that could be concluded by mid-June this year, Molnar said.

The EC decision on Nabucco was part of a EUR 3.5 bln support package announced Wednesday for European energy projects, including EUR 1.25 bln for investment in carbon capture and storage, EUR 500 mln for offshore wind projects, EUR 1.025 bln for gas network interconnection, EUR 705 mln for electricity grid interconnection, and EUR 20 mln for Mediterranean island energy interconnections.

Project involving Hungary that will benefit from this EU package include a planned gas pipeline connection between Slovakia and Hungary (Velky Krtis-Balassagyarmat), to be aided by EUR 25 mln, and the Szeged-Arad pipeline between Hungary and Romania, which will receive EUR 30 mln.

Construction of the Szeged-Arad pipeline is already underway, and will be completed by mid-2010, according to earlier reports. Project costs of the 47-kilometer Hungarian section, which will connect to a newly built 25-kilometer Romanian section, were earlier estimated at HUF 9 bln (EUR 32 mln).

The EC will also provide a total EUR 20 mln to be distributed among all EU member states, to be spent on infrastructure and equipment to permit west-east gas flow in the event of short-term supply disruption, such as that witnessed in early January due to a Russian-Ukrainian dispute.