Nabucco West in talks to add partners for gas pipeline (updated)
16/04/2013 12:31
(Adds interview details, quotes) * At least one other European company expected to join * Biggest shareholder OMV confirms 'interested partners' * MD says no current shareholders expected to leave before June By Michael Kahn VIENNA, April 16 (Reuters) - Shareholders in the planned Nabucco West pipeline to bring natural gas from Azerbaijan to Europe are in talks to add at least one other European company to the project, the consortium's managing director told Reuters. Nabucco West is competing with the rival Trans Adriatic Pipeline (TAP) for access to gas from the giant Azeri Shah Deniz II field in the Caspian Sea, which represents Europe's best hope of reducing its reliance on supplies from Russia. "We definitely expect further evolution of the shareholder structure," Nabucco West chief Reinhard Mitschek said in an interview in his Vienna office. "I expect one or other European companies will join the consortium. There is no indication any partner will leave." Gerhard Roiss, chief executive of Nabucco's biggest shareholder OMV OMVV.VI , told Reuters: "There are interested partners who would like to join. There are also talks on this, but I cannot say who would like to join because it's confidential." Nabucco's other shareholders are Bulgaria's BEH, Turkish firm Botas, Hungarian energy company MOL MOLB.BU , and Romania's Transgaz ROTGN.BX . Bringing new companies on board could help ease concerns about the dominance of state-controlled firms in the consortium after German utility RWE RWEG.DE sold its nearly 17 percent stake to OMV earlier this month and another potential German partner, Bayerngas, said it would not join. ID:nL5N0D10D6 The Shah Deniz group, led by BP BP.L and Norway's Statoil, has said it will announce by the end of June whether Nabucco West or TAP will be chosen to deliver the gas. Mitschek said he did not expect any current Nabucco West shareholders to leave either before or after that decision. RUSSIAN DOMINANCE The projects are strategically significant because they would reduce European energy dependence on Russia, which provides around a quarter of the continent's 500 billion cubic metre (bcm) annual gas consumption. Russia has frequently been at loggerheads with Ukraine, across which much of that gas is piped, and many European countries were badly hit when Russia cut supplies to its neighbour in a major dispute at the start of 2009. Analysts have said Nabucco West project would serve the most Russian-reliant regions, in central and southeast Europe, better than TAP ID:nL6N0CA80M . But they also say that TAP's shareholder structure - comprising Switzerland's Axpo Holding AXPOH.UL , Germany's E.ON Ruhrgas EONGn.DE and Statoil STL.OL - is better than Nabucco's because it is less state-dominated. Due to limited Azeri supplies in the mid-term, and from Central Asia as a whole, the Nabucco group last year scaled down its project and renamed itself Nabucco West. ID:nL6E8FQCS2 Crossing Bulgaria, Romania, Hungary and Austria, which analysts expect to see an 8 bcm rise in gas demand by 2030, it is now planned at half the size of the original $12 billion, 32 bcm Nabucco pipeline backed by the European Union. TAP initially aims to have a capacity of 10 bcm which could be increased to 20 bcm in time. Production from Shah Deniz II is expected to begin in 2018 or 2019 and rise to 16 bcm per year, with 10 bcm earmarked for Europe and 6 bcm for Turkey. ID:nL6N0ASCJ7 IRANIAN STAKEHOLDER One question has been whether the presence of Iran's Naftiran Intertrade Co. as a Shah Deniz stakeholder would cause any problem, because of potential U.S. sanctions over Iran's disputed nuclear programme. But Mitschek said he did not believe this would be an issue. "As far as I'm informed, it won't affect the Shah Deniz deals with Turkish and European gas buyers," he said. "Officials want to diversify the gas supply in southeastern Europe." While Mitschek declined to detail the price tag of the downscaled Nabucco project, he suggested there was room to drive down costs even further. "We have room for optimization," he said. (Additional reporting by Alexandra Schwarz, editing by Mark Trevelyan) ((michael.kahn@thomsonreuters.com)(+420 224 190 443)(Reuters Messaging: michael.kahn.thomsonreuters.com@reuters.net)) Keywords: NABUCCO SHAREHOLDERS/