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RWE Seeks to Exit Nabucco Gas Pipeline Project - Sources

Date : 12/03/2012 @ 11:46PM
Source : Dow Jones News
Stock : BP (BP)
Quote : 51.39  0.2 (0.39%) @ 5:30AM
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RWE Seeks to Exit Nabucco Gas Pipeline Project - Sources

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By Ali Ulucay

FRANKFURT--German utility RWE AG (RWE.XE) plans to exit the Nabucco pipeline consortium, one of two European pipeline projects that are presently competing to ship natural gas from Azerbaijan to Europe by 2018, two people familiar with the matter told Dow Jones newsletter Energy Daily Monday.

The people said RWE seeks to sell its 16.6% stake in the Nabucco project this year.

They added that RWE's decision to exit the project is due to a dispute with Austria's OMV AG (OMV.VI), another key member of the Nabucco consortium, over the future shareholder structure of the pipeline company.

The dispute is related to recent comments from the Shah Deniz 2 gas field consortium, which said in early November that it intends to take up to 50% in the Nabucco consortium. While RWE would welcome the consortium talking a majority stake in Nabucco, OMV seeks to retain control of the gas transit, the people said.

RWE, OMV and the Nabucco pipeline company declined to comment on the matter.

Talks between the Shah Deniz 2 consortium and Nabucco shareholders over a participation of the gas producers in the pipeline project are ongoing at present and Nabucco has said it hopes to conclude these talks this year.

BP PLC (BP), France's Total SA (TOT) and Azerbaijan's state oil company Socar are jointly developing the giant gas field Shah Deniz 2 off the Azeri Caspian Sea coast. About 10 billion cubic meters of gas from this field are earmarked for European markets from around 2018.

--Jan Hromadko contributed to this article.

Write to Ali Ulucay at ali.ulucay@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires




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