BUDAPEST (Reuters) - European officials expressed support on Tuesday for plans to build a pipeline bringing gas from Central Asia to Western Europe but stopped short of offering direct financing for the project.

The stalled Nabucco pipeline scheme has been given new impetus by a gas dispute between Russia and Ukraine, which led to a cut-off of supplies of Russian gas affecting millions of people in central Europe in early January.
EU and Central Asian officials were meeting in Budapest on Tuesday to discuss the 10-billion-euro ($12.96 billion) Nabucco project, which envisages piping gas 3,300 km (2,000 mile) from the Caspian region through Turkey, Bulgaria, Romania and Hungary to a distribution hub in Austria.
Nabucco aims to meet 5 percent of Europe’s gas needs.
Czech Prime Minister Mirek Topolanek, who holds the EU Union’s rotating presidency, said it was time for the bloc to move the project forward to reduce the continent’s dependence on Russian gas and diversify supply.
Hungary’s Prime Minister Ferenc Gyurcsany, the conference host, said the EU should help finance Nabucco because it was an issue of national security and not a commercial project.
“Having or not having energy could become a question of national sovereignty and stability,” Gyurcsany said. “It’s time for the EU to take on the (financial) risks private companies are not willing to take on as they clearly see this is not simply a business enterprise.”
Gyurcsany called on the EU provide within months up to 300 million euros in non-refundable capital financing to Nabucco and further loans through the European Investment Bank and the European Bank for Reconstruction and Development. But European Energy Commissioner Andris Piebalgs said that although the EU could provide loans and guarantees, it should not consider providing capital financing.
“I believe that we can facilitate getting loans in such a difficult situation of the credit crunch,” Piebalgs told reporters on the sidelines of the conference. “But not go beyond it because then it doesn’t make sense, because then it’s not anymore the consortium’s project but a public private partnership and I’m not ready at this stage to even consider such a type of option,” Piebalgs said.
The European Bank for Reconstruction and Development (EBRD) said it was ready to consider giving a financial contribution to the Nabucco gas pipeline project.
Tuesday’s talks are attended by consortium members Austria, Bulgaria, Germany, Hungary, Romania and Turkey as well as Topolanek, representing the EU, Piebalgs, government representatives from Azerbaijan and Iraq and corporate officials from Turkmenistan.
---------------Reluctant suppliers, Russian threat
High on the list of difficulties is securing enough gas supplies. Critics say only Russia, which is planning its own rival scheme known as South Stream, has the gas and infrastructure to supply the pipeline.
Potential suppliers, such as Turkmenistan, Azerbaijan and Kazakhstan are reluctant to sign up until financing is in place and the pipeline has been built.
Topolanek said Russia’s plans to build the North and South Stream pipelines threatened the viability of the Nabucco project but Europe’s own plans are not anti-Russian.
“There’s no antagonism here,” Topolanek told the conference “We don’t want Nabucco against somebody, we want it for us.”
The European Commission also supported the Nabucco project and wanted it to move ahead, commission President Jose Manuel Barroso said.
“We remain excessively vulnerable regarding gas delivery to the European Union and other neighbouring countries,” Barroso said in a video message.
Azerbaijan, a potential supplier, confirmed that it remains committed to Nabucco and called on participants to move the project forward.
“As far as Nabucco is concerned, Azerbaijan has always been supportive to this project and today once again we’d like to declare that we continue to support,” Azeri President Ilham Aliyev told the conference.