02-09-2010 22:09:03

OMV in talks with Azerbaijan on Nabucco gas (UPDATED)

VIENNA – OMV AG, the Austrian partner of the planned Nabucco natural gas pipeline, is now in talks with Azerbaijan's state oil company SOCAR about gas supply for the European Union-backed pipeline project, the Austrian Finance Ministry was quoted by Dow Jones as saying on Thursday.

Nabucco, the EU and the six commercial partners in the project, intend to source up to 31 billion cubic meters of gas to Europe from the Caspian region as of 2015, bypassing Russia on the way.

But the partners still need to secure enough gas to fill the pipeline in the first years. The Azerbaijani gas field Shah Deniz II, which is currently being developed, has been named an anticipated key source. Negotiations between oil and gas companies, Azerbaijan and the consortium developing Shah Deniz II are expected to begin soon, but all parties involved declined to comment on the timing or the volume being offered.

Austrian State Secretary at the finance ministry, Reinhold Lopatka, said Thursday that negotiations have already started.

Austria has a great interest in Azerbaijan as a supplier for Nabucco, Lopatka said, adding that: "The state-owned energy group SOCAR is in negotiation with OMV (over gas supply)".

The Nabucco pipeline project aims to decrease the European Union’s dependence on Russian imports by bringing Caspian gas to a hub in Austria via the Balkans. The gas would be shipped to Europe via Turkey, Bulgaria, Romania and Hungary. Construction of Nabucco will begin in 2011, as the recent gas crisis between Russia and Ukraine has convinced decision-makers of the need to speed up the project.

The project, worth 7.9 billion euros, is managed by the Vienna-based Nabucco Gas Pipeline International. Partners in the consortium with equal stakes of 16.67% are Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Romanian Transgaz, Turkish Botas and German RWE.

TAGS: Azerbaijan, Baku, OMV AG, Austria, SOCAR, gas, European Union, pipeline project, Austrian Finance Ministry, Nabucco, Europe, Caspian region, Shah Deniz II, Austrian State Secretary, Reinhold Lopatka, Balkans, Bulgaria, Romania, Hungary, Ukraine, Turkey, Nabucco Gas Pipeline International, MOL, Bulgargaz, Transgaz, Botas, RWE