RWE Executive:Nabucco Gas Supply Deals Now Unlikely In 1st Half 2010

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 between the two countries and the European Union.

The original target of striking deals with Azerbaijan and Turkmenistan is now unlikely to be reached, said Stefan Judisch, chief executive of RWE's supply and energy trading unit, in a conference call to journalists.

"We expect to reach results [in terms of supply deals] in coming months," after certain intergovernmental contracts have been signed, Judisch said.

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.

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.

Company website: www.rwe.com

-By Jan Hromadko, Dow Jones Newswires; [phone]; [e-mail]