French utility company GDF Suez (EPA:GSZ) has bought from Austria’s OMV AG (VIE:AMV) a stake in the Nabucco pipeline venture, the EU-backed project designed to transport Caspian natural gas to Europe.
The GDF Suez share price was around one percent up in morning trading in Paris on Monday, May 28. The OMV share price also rose in early trading in Vienna.
OMV announced on May 28 that it had sold approximately nine percent of project company Nabucco Gas Pipeline International GmbH to GDF Suez for an undisclosed price.
The French utility has now become the sixth partner in the pipeline project. The transaction has come
shortly after OMV took over the stake from German utility RWE (ETR:RWE, FRA:RWE). The sale, subject to certain conditions, is expected to close in the second half of 2013.
“Having GDF SUEZ as new partner for Nabucco West is another milestone for the project,” OMV’s chief executive Gerhard Roiss opined in a news release. “It proves that we are on the right way to provide Europe with more gas and to secure new sources of gas for the future.”
The Nabucco pipeline, which also includes partners from Turkey, Bulgaria, Romania and Hungary, had been originally planned for a length of 3,900 kilometres but was later scaled back to a 1,315 kilometres version linked to a Turkish pipe.
**Trans Adriatic Pipeline**
The Nabucco pipeline, which is seen as an option to reduce Europe’s reliance on Russian gas supplies, is competing with the shorter Trans-Adriatic Pipeline (TAP) across Greece to Italy for rights to export gas from Azerbaijan’s Shah Deniz field.
Azerbaijan is nearing a decision which pipeline to choose for its future exports – the Nabucco or the TAP. The decision is expected next month from partners in the Shah Deniz consortium, led by the UK energy giant BP (LON:BP, NYSE:BP) and the Azeri state energy company Socar.
The TAP pipeline is 800 kilometres long, including a stretch under the sea to southern Italy. Shareholders in the project include Norway’s Statoil (NYSE:STO), which has a stake in the Azeri gas fields. On Monday, Reuters quoted Gulmira Rzayeva, a leading research fellow at the Centre for Strategic Studies under the President of the Republic of Azerbaijan, as saying that both pipelines had advantages and disadvantages.
The newswire reported that the European Union had recently switched from support for Nabucco to project neutrality. Although the EU will not have a direct say in the Azeri decision, its position could still make a difference.
!m[GDF Suez’s share price was 0.75 percent up at €16.42 in Paris](/uploads/story/2540/thumbs/pic_1_inline.PNG)
In its statement OMV noted that the deal with GDF Suez was an important step forward. “With this strengthened pan-European partnership we are looking forward to the upcoming decision of the Shah Deniz II consortium concerning their preferred delivery route to Europe,” OMV’s Roiss said.
**GDF Suez’s share price was 0.75 percent up at €16.42 in Paris as of 10:55 CEST on 28 May 2013. OMV’s share price was 0.76 percent up at €37.64 in Vienna.**
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