UPDATE: Iraqi Gas From Pearl May Supply Nabucco By 2014 -OMV
November 27 2009 - 12:16PM
Dow Jones News
Northern Iraqi gas production from the Pearl Production Co.
could be available in five years to feed into the Nabucco gas
pipeline and supply Europe, Austrian oil company OMV AG (OMV.VI)
said Friday.
"Pearl is very important because they have access to a major gas
field. It has the capacity to produce an important part of the
supply of Nabucco," said the company's Chief Executive Wolfgang
Ruttenstorfer at a press briefing in London. "The gas is there and
could be available in five years."
OMV owns a 10% stake in Pearl.
The 3,300 kilometer Nabucco pipeline is an ambitious project
that aims to open a new supply route for Central Asian and Middle
Eastern gas to Europe via Turkey, Bulgaria, Romania, Hungary and
Austria. The project has the backing of the European Union, which
sees it as a way to reduce dependency on imports of Russian natural
gas.
OMV, Germany's RWE AG (RWE.XE), Turkey's Botas, Bulgarian Energy
Holding, Romania's Transgaz and Hungary's MOL Nyrt. (MOL.BU) are
members of the Nabucco consortium. They plan to decide whether to
proceed with the project in the fourth quarter of 2010, with
operation due to commence in 2014.
Gas fields in northern Iraq could be developed in several years
and linked fairly quickly to Turkey through an inexpensive feeder
pipeline, Ruttenstorfer said. He added that he is confident that
political tensions over energy exports from the Kurdish region of
Iraq will have been resolved within the time frame of the Nabucco
project.
The economic downturn that has left Europe with a surplus of gas
has not fundamentally changed the viability of Nabucco, said
Ruttenstorfer. "We are going to have an oversupply of gas in Europe
for the next three to five years," he said, but after that the
region will see its need for gas imports rising again.
The downturn has also had little impact on the projected EUR7.9
billion cost of the pipeline, said Ruttenstorfer.
Partners in the Nabucco consortium will need to secure around
half of the pipelines planned 31 billion cubic meter a year
capacity in order for the project to get the go-ahead as scheduled
for the fourth quarter of 2010.
In addition to Iraq, around half this gas will probably have to
come from Azerbaijan, so the decision from BP PLC (BP), Azeri state
oil company Socar and their partners on whether to proceed with the
second phase of the Shah Deniz gas project will be crucial,
Ruttenstorfer said.
Many Nabucco consortium members are talking to the Azeris about
gas supply, he said.
-By Lananh Nguyen and James Herron, Dow Jones Newswires; +44
(0)20-7842-9479; lananh.nguyen@dowjones.com
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