France's GDF Suez Partners with Nabucco West, with OMV Share Acquisition

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Researched by Industrial Info Resources (Sugar Land, Texas)--French utility firm GDF Suez agreed to acquire a 9% stake in Nabucco Gas Pipeline International GmbH from Austria's OMV Aktiengesellschaft (WBAG:OMV). The transaction is subject to certain conditions and is expected to close in the second half of 2013.

Nabucco's German partner RWE had sold its stake in Nabucco to OMV in April. The Nabucco consortium also includes energy companies BOTAS in Turkey; Bulgarian Energy Holding (BEH); Transgaz in Romania; and FGSZ in Hungary.

Nabucco West is a short-cut version of the 3,900-kilometer Nabucco pipeline project, which provides for the construction of a pipeline from the Turkish-Bulgarian border to Austria.

"The industry expertise of GDF Suez as the operator of the largest gas transport network in Europe, and its status as the second-largest buyer of natural gas in Europe, are of immense advantage to the project," said Rainer Mitschek, CEO of Nabucco Pipeline, in a company statement. "GDF Suez is already very active in the Nabucco countries."

"Having GDF Suez as new partner for Nabucco West is another milestone for the project," said Gerhard Roiss, CEO of OMV, according to a statement after the share sale. "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."

Currently, the Shah Deniz consortium considers two options for its gas transportation to Europe: the Trans Adriatic Pipeline (TAP) and the Nabucco West pipeline. The final decision on the pipeline route will be made in June 2013.

The Trans Adriatic Pipeline is designed to ship Azeri natural gas to Europe, via Greece and Albania, to the south of Italy. The pipeline capacity will be 10 billion cubic meters (bcm) per year, which can be doubled to 20 bcm per year. TAP's shareholders are Switzerland's AXPO (42.5%), Norway's Statoil (42.5%) and Germany's E.ON Ruhrgas (15%).

In early February, the Turkish government signed an agreement with Azerbaijan to build the Trans Anatolian Gas Pipeline, a natural gas pipeline that will ship Azeri gas to Turkey's Bulgarian border. For additional information, see February 11, 2013, article - TANAP Construction May Begin This Year, Says Turkish PM.

The current shareholders in the Nabucco West consortium are BEH of Bulgaria, BOTAS of Turkey, Hungary's FGSZ, OMV, Transgaz of Romania, and GDF Suez. The European Union wants to decrease its dependence on Russian natural gas, which supplies a quarter of its annual natural gas demand.

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