Nabucco's Mitschek: Expects Equity Share Agreement with Shah Deniz by October

  By Nicole Lundeen 
 

VIENNA--Negotiations between the Nabucco pipeline consortium and the group behind the Shah Deniz II gas field are progressing well and an agreement is expected by the end of this month, Reinhard Mitschek Nabucco Gas Pipeline International GmbH's managing director said Monday.

"We are very close to agreement with the [Shah Deniz] consortium," Mr. Mitschek said in a conference call with journalists, adding "we envisage agreement by end of October."

The partners developing the Shah Deniz gas field have been negotiating with the Nabucco consortium for an equity share in the pipeline project. Reaching an agreement is seen as an important vote of confidence in the pipeline as the Shah Deniz partners have already reached an agreement with the competing pipeline proposal, the Trans-Adriatic Pipeline. A final decision as to which pipeline will deliver gas from the Caspian Sea region to Europe is expected next year.

Mr. Mitschek said that for a mainstream pipeline such as Nabucco it was important to have both upstream and downstream partners and therefore he would welcome Shah Deniz involvement in the pipeline.

The share of Nabucco's Hungarian partner MOL Nyrt. (MOL.BU) has decreased in the last few weeks by about 2%, he said. Once there is a positive decision from Shah Deniz in favor of Nabucco, he added, he is certain that the Hungarian oil company will remain a committed partner. MOL has been withholding financing from the pipeline venture.

The director also said that there were ongoing "fruitful" negotiations with the German Bayern Gas GmbH to join the consortium.

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