FRANKFURT Dec 3 RWE AG could face
further headwinds in the planned sale of its Czech gas network
should it choose to exit the Nabucco pipeline project.
Germany's second-biggest utility may quit Nabucco - designed
to transport Caspian gas into Austria - a source told Reuters on
Sunday, raising fears the project may be stopped after already
having been scaled back earlier this year.
Such a decision could make sense given Nabucco faces
competition from rival projects and has been widely criticised
for escalating costs. Yet without the prospect of input from
Nabucco, RWE's Czech gas pipeline unit Net4Gas could become less
"It is bad news for investors in eastern Europe if a company
such as RWE pulls out of a project like Nabucco. This can also
have an impact on assets in the region," said Heino Hammann,
analyst at NordLB.
RWE is planning to sell up to 7 billion euros ($9.1 billion)
in assets by the end of 2013 in a move to keep its credit
rating, lower its debt after years of pricey acquisitions and
increase investments following Germany's decision to exit
Net4Gas, which sources said could fetch between 1.4 billion
euros and 2 billion, is the biggest item on RWE's list and has
proven difficult to sell, with sources saying a deadline for
final bids had been pushed back to February from November.
Analysts have noted that prices for the assets could be
depressed by the opening of the two Nord Stream pipelines that
offer an alternative route to transport Russian gas to western
Privately-held Czech oil and gas group KKCG and Czech energy
investment firm EPH have both said they are among the bidders
for Net4Gas and are seen as the most likely to succeed.
Net4Gas, which accounted for 11 percent of RWE's 2011 net
profit, operates 3,600 km of pipeline transporting Russian gas
from Slovakia to Germany while also supplying the Czech market.
Other bidders include Global Infrastructure Partners (GIP),
Macquarie, and Allianz with Borealis Infrastructure
Management, sources have said.
Nabucco West foresees the construction of a 1,300 kilometre
pipeline that will run from the Bulgarian/Turkish border to
Original plans were for a 4,000 km pipeline, but critics
warned that estimated costs of more than $12 billion would make
it too pricey. Azerbaijan and Turkey joined forces earlier this
year to own and operate the main export pipeline via Turkey,
TANAP, shrinking the Nabucco plan to its western part only.
($1 = 0.7689 euros)
(Additional reporting by Jan Lopatka in Prague; Editing by