RWE to back Caspian pipeline

RWE to back Caspian pipeline

By Ed Crooks in London

Published: February 2 2008 02:25 | Last updated: February 2 2008 02:25

RWE, one of Germany’s biggest energy companies, is to become the sixth company backing the proposed Nabucco pipeline to bring gas from the Caspian region to Europe, bolstering hopes for the troubled plan.

RWE is expected to be formally announced as a member of the consortium at a ceremony in Vienna next week, joining five companies from Austria, Hungary, Romania, Bulgaria and Turkey. RWE on Friday would not confirm the reports, saying only that it had expressed its interest in Nabucco and was “very happy about these positive signals”.

Nabucco would provide an alternative source of supply to Russian gas for the European Union, bringing supplies from Azerbaijan and perhaps from Iran, Iraq, Turkmenistan and Kazakhstan. However, Gazprom, Russia’s state-controlled gas company, has been making progress with a rival pipeline, South Stream, planned to take gas from Russia under the Black Sea to Bulgaria and thence to the rest of the EU.

Bulgaria last month signed up to back the project. Gazprom also took a controlling stake in NIS, a gas company in Serbia, which could be on the route of a branch of South Stream, and concluded its deal with OMV of Austria to take 50 per cent of its Baumgarten gas trading hub.

That deal was controversial because OMV leads the Nabucco consortium, and Baumgarten would be where the pipeline would end. Speaking to the Financial Times last week, Wolfgang Ruttenstorfer, the chief executive of OMV, insisted the Gazprom deal was not a barrier to Nabucco going ahead.

OMV repeated its support for Nabucco on Friday, as it made a formal notification to the European Commission of its aspiration to bid for Mol of Hungary.

RWE has said it wants to invest €1bn in exploration, development and infrastructure for gas in the Caspian region.