UPDATE 2-OMV in talks on RWE's Nabucco gas stake

Fri Dec 7, 2012 8:26am EST

Related Topics

* OMV needs pipeline to bring Black Sea gas to Europe

* RWE says sale of stake has been initiated

VIENNA/FRANKFURT Dec 7 (Reuters) - Austrian energy group OMV may buy German utility RWE's stake in the Nabucco gas pipeline project that aims to bring Caspian supplies to Europe.

"We are in talks with RWE about taking over their shares," Chief Executive Gerhard Roiss told reporters on Friday. Both companies own 16.67 percent stakes in the project.

A source familiar with the matter had told Reuters on Sunday that RWE may soon quit Nabucco and could sell its stake to OMV.

RWE had said in May it was reviewing the Nabucco project.

A spokeswoman for RWE confirmed the sale of the company's stake in Nabucco had been initiated, adding RWE would continue efforts to make Caspian gas available to its home market through, for example, supply contracts.

The partners of Germany's second-biggest utility have proposed a scaled-down version of the project called Nabucco West that would run from Turkey's western border to Austria.

Nabucco West foresees the construction of a 1,300 kilometre pipeline from the Bulgarian/Turkish border to Austria.

Original plans were for a 4,000 km pipeline. Critics said estimated costs of more than $12 billion would make it too pricey and there would not be enough gas available to fill the pipeline with non-Russian supplies.

Nabucco West's owners, in the long term, will be countries and companies with gas reserves bound for Europe, Roiss said, noting RWE had no gas of its own in the Black Sea region.

"If I did not have my own gas, I also would not take part (in Nabucco)," he said.

OMV's Romanian unit Petrom and U.S. partner Exxon Mobil have made a potentially major Black Sea gas find.

Roiss said it would not be clear until 2014 or 2015, after more drilling, how much gas was at hand. "If we find a lot of gas here then we need a pipeline. You cannot develop a field without a pipeline."

That meant it may make sense to build a version of Nabucco for this purpose alone, even it did not win the contract to transport Caspian gas to Europe, he said.

Nabucco's other four shareholders are Bulgarian group BEH, Turkish firm Botas, Hungarian company MOL, and Romanian group Transgaz.

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