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Construction of Nabucco Pipe May Start in 2015

OMV AG (OMV) said construction of the Nabucco natural gas pipeline to transport gas from the Caspian region to Europe may start in 2015.

Should the owners of the BP Plc-led Shah Deniz field in Azerbaijan make a decision on whom to award its gas next year, construction could start in 2015 and be completed in 2018, OMV's gas head Hans-Peter Floren told shareholders at the company's annual shareholder meeting in Vienna this week.

Nabucco, which is a joint venture of OMV, Germany's RWE AG (RWE), Budapest-based Mol Nyrt. (MOL), Bulgargaz EAD, Romania's Transgaz SA and Ankara-based Boru Hatlari ile Petrol Tasima AS, has faced repeated delays after struggling to secure fuel sources. Mol said last month that it isn't prepared to finance the pipe and may sell its stake.

Chief Executive Officer Gerhard Roiss told OMV's shareholders today that Nabucco is "more important than ever" as it's needed to transport gas from the OMV-Exxon Mobil Corp. (XOM) gas find in the Black Sea. "It's important to have a pipeline in this region," he said.

OMV announced in February that the Exxon-operated Domino-1 deep-sea offshore well encountered 1.5 to 3 trillion cubic feet in what may be OMV's biggest gas find ever.

The Nabucco project may now be cut to "Nabucco West" starting at the Turkish-Bulgarian border and be complimented by the Azeri-Turkish Trans-Anatolia Pipeline, known as Tanap, Roiss said.

Source: Bloomberg

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