German utility RWE AG (RWE.XE), a member of the consortium that plans to build the natural gas pipeline Nabucco, said Tuesday it no longer expects gas supply deals with Azerbaijan and Turkmenistan will be signed in the first half of 2010 in light of pending political agreements.
German utility RWE AG (RWE.XE), a member of the consortium that plans to
build the natural gas pipeline Nabucco, said Tuesday it no longer expects gas
supply deals with Azerbaijan and Turkmenistan will be signed in the first half
of 2010 in light of pending political agreements.
Stefan Judisch, chief executive of RWE's supply and energy trading unit also
ruled out that costs for the 3,300 kilometer pipeline would rise above the
currently forecast EUR7.9 billion.
The original target of striking deals with
Azerbaijan
and
Turkmenistan
is
now unlikely to be reached, said Judisch.
"We expect to reach results [in terms of supply deals] in coming
months," he added.
Judisch added, however, that a final investment decision is still expected to
be made before the end of the year and first gas will likely flow in 2014.
Judisch said that
Turkmenistan
has
repeatedly reassured that it will stick to its commitment to supply Nabucco
with gas. He added, however, that
Turkmenistan
has
subsequently expressed its desire to "safeguard" its supply
commitment via a bilateral agreement with
Germany
.
Judisch said that such a procedure was understandable for a country that is in
the process of drastically altering its energy export policy.
Turkmenistan
--a
former Soviet republic--has a long history of supplying gas to
Russia
, but
is seeking to diversify its gas exports in deals with customers in
Europe
and
Asia
.
RWE's Judisch also said that there have been "positive signals" in
terms of Nabucco gas supplies from
Azerbaijan
,
which appears to be nearing an agreement with
Turkey
over
the pricing of existing gas deliveries.
Azerbaijan
supplies around six billion cubic meters of natural gas to
Turkey
.
Such an agreement could pave the way for a deal over gas supplies for Nabucco,
Judisch said, adding the two countries could sign such an accord in May.
The pipeline, slated to transport gas from the Caspian region to central
Europe
via
Turkey
and
Austria
, is
considered crucial to secure
Europe
's
growing demand for natural gas as domestic supply is steadily falling.
With a planned capacity of up to 31 billion cubic meters of gas a year, Nabucco
would further diversify
Europe
's
supply sources, bypassing traditional pipeline routes for Russian gas.
The Nabucco consortium comprises German utility RWE AG (RWE.XE),
Austria
's OMV
AG (OMV.VI) and
Hungary
's MOL
Nyrt (MOL.BU),
Turkey
's
Botas
,
Bulgaria
's
Bulgarian Energy Holding and
Romania
's
Transgaz.
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