RWE Executive Sees Good Progress On Nabucco Gas Supply Deals

German utility RWE AG (RWE.XE), a member of the consortium planning to build the Nabucco gas pipeline, Tuesday said it is optimistic the project is making "good progress," after the European Commission Monday won the mandate to enter talks with two key suppliers of the pipeline.

RWE's strategy chief Leonhard Birnbaum told reporters on the sidelines of an energy conference in Munich that he hopes the EU talks with Azerbaijan and Turkmenistan will speed up the process to secure gas-supply deals for the Nabucco project.

"If the talks are successful there will be enough gas [to fill the pipeline} even without [supplies from] North Iraq," Birnbaum said.

The Nabucco pipeline is slated to ship 31 billion cubic meters of natural gas from the Caspian region to central Europe. Azerbaijan, Turkmenistan and the Kurdish north of Iraq have long been considered key suppliers for the pipeline project.

However, despite years of talks the Nabucco consortium has so far failed to secure any gas supplies.

Birnbaum said he is optimistic the Nabucco consortium can shift its focus in coming months to more technical issues such as an open season process, which should help gauge market demand before making a final investment decision, once the gas supply agreements are in place.

He added the timeline for completion of the Nabucco project hasn't changed.

The consortium, which also includes Austria's OMV AG (OMV.VI) and Hungary's MOL Nyrt (MOL.BU), previously said it plans for Nabucco to begin operations in 2017.

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