Austria's OMV to Build Gas-Fired Power Plant in Turkey

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Researched by Industrial Info Resources (Sugar Land, Texas)--OMV Gas & Power GmbH (Austria), a leading oil and gas company in Central Europe, proposes to boost its natural-gas-based power generation endeavors by setting up a gas-fired power plant in Turkey. OMV Power International, a wholly owned subsidiary of OMV Gas & Power, has signed a share purchase agreement to acquire 60% of Borasco Elektrik Uretim Sanayi ve Ticaret A.S. (Turkey).

According to the agreement, Borasco Elektrik will set up an 890-megawatt (MW) gas-fired power plant in Samsun, Turkey, and sell the generated electricity in the Turkish market. OMV's partners in the $725 million venture are international financial services provider Lehman Brothers Holdings Incorporated (NYSE:LEH) (New York, New York) and Turkey's Enerji Yatirimlari San ve Tic A.S. The plant will be located on Turkey's Black Sea Coast, and will be fed by Russia's Blue Stream gas pipeline. Construction of the plant will begin later this year, with start-up expected in late 2010. The new project will contribute to ensuring power supply security in the Turkish market, which is currently growing at a rate of 10%.

OMV's move is part of its strategy to integrate the gas value chain into power generation. The project in Turkey follows the launch of OMV's 860-MW gas-fired power plant at the Petrom refinery in Petrobrazi (Romania) and the proposed gas-fired power plant in Haiming (Germany). In 2006, OMV entered the Turkish petrol market by acquiring a stake in Petrol Ofisi, Turkey's leading petrol retailer and filling station. OMV is also a member of the Nabucco consortium, a group of companies that jointly proposes to construct the Nabucco pipeline, which will transport natural gas from Turkey to Austria, Romania, Bulgaria and Hungary.

OMV Gas & Power GmbH is an affiliate of OMV Aktiengesellschaft (WBAG:OMVKY) (Vienna, Austria), Austria's largest listed industrial company in terms of turnover. It is one of the largest integrated oil and gas companies operating in Central Europe, with an estimated retail market share of 20%. Over the years, OMV has been consolidating its market leadership by acquiring shares in major petrochemical and oil companies, including AMI Agrolinz Melamine International GmbH (Austria) (50%), Borealis A/S (United Arab Emirates) (35%), Petrom SA (Romania) (51%) and MOL (Hungary) (20%). OMV recently abandoned its bid to acquire MOL after the European Commission rejected its proposal. The company operates refineries in Germany, Austria and Romania, and has more than 2,500 gas stations across Central Europe.

Along with activities of gas distribution, transmission and marketing, OMV has been increasingly eyeing the power generation market. In 2006, the company established a wholly owned subsidiary, the OMV Future Energy Fund, to support renewable energy projects. OMV's investment in the Borasco power plant further reinforces its transformation from an oil and gas concern to an integrated energy company. OMV is listed in the "Global 100 Ranking" presented at the World Economic Forum in Davos as one of the world's six most sustainable energy companies.

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