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OMV in talks with Shell, BP on Nabucco gas

Reuters

Fri Nov 14, 2008 12:27pm EST

By Tom Bergin

LONDON, Nov 14 (Reuters) – Austria’s OMV AG (OMVV.VI: QuoteProfile,ResearchStock Buzz) is in talks with BP and Royal Dutch Shell to buy Azeri and Iraqi natural gas for transport through the planned Nabucco pipeline, which the EU hopes will reduce its reliance on Russian imports.

OMV spokesman Thomas Huemer said the talks with BP (BP.L: QuoteProfile,ResearchStock Buzz) were related to its leading role in the Shakh-Deniz project in Azerbaijan, while Shell (RDSa.L: Quote,ProfileResearchStock Buzz) has signed a gas deal with Baghdad that could lead to it becoming a major producer there.

The Nabucco consortium hopes gas from phase 2 of the Shakh-Deniz project will be the bedrock of supplies to help get the pipeline off the ground, with additional supplies coming later from Iraq and possibly Iran and the Caspian region.

The shareholders are OMV, Romanian gas pipeline operator Transgaz TGNM.BX German utilituy RWE (RWEG.DE: QuoteProfileResearch,Stock Buzz), Hungarian oil company MOL MOLB.BU, Turkish pipeline operator Botas and Bulgarian state gas company Bulgargaz.

OMV said building on the project would start in 2010 and first gas was planned for 2013, but many analysts doubt the project will be able to secure enough gas to get off the ground.

Nabucco spokesman Christian Dolezal said the consortium was confident enough gas would be secured.

The second, $10 billion phase of Shakh-Deniz is expected to come on stream between 2011 and 2012.

BP and Norway’s Statoil (STL.OL: QuoteProfileResearchStock Buzz) control Shakh-Deniz, which produces around 15 million cubic metres of gas per day and has reserves of 1.2 trillion cubic metres. (Reporting by Tom Bergin; editing by Simon Jessop)

 

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