FRANKFURT (Dow Jones)
German utility RWE AG (RWE.XE) Friday said a decision on whether to invest in the European Union-backed Nabucco natural gas pipeline won't be made until 2011.
"In light of the still pending gas supply contracts the original schedule can't be met" said an RWE spokesman, confirming a statement by Michael Ulbrich, an executive at OMV AG (OMV.VI) with responsibility for pipeline projects.
Ulbrich told Austrian newspaper Der Standard: "This year we certainly won't make it, it will be in 2011."
RWE and OMV are two of the six commercial partners in the Nabucco pipeline project, which is slated to carry Caspian region gas 3,000 kilometers to Western Europe via Turkey, Romania, Bulgaria, Hungary and Austria from 2014, bypassing Russia on the way, thereby reducing Europe's dependence on gas from its big Eastern neighbor.
A major hurdle for the project has been to secure supply to fill the pipeline's final 31 billion-cubic-meter capacity. The consortium has been in negotiations with partners in Azerbaijan, Turkmenistan and Iraq over future supply, but these negotiations are taking longer than initially anticipated.
Originally, the consortium was set to make a decision this year on whether to invest in the pipeline, but due to the ongoing negotiations over supplies, the decision had been delayed to the end of 2010.
Meanwhile, the projected start of Nabucco gas deliveries has also been delayed to 2015 from a projected start in 2014.
In addition to OMV and RWE, the consortium behind the estimated EUR7.9 billion Nabucco pipeline includes Romania's Transgaz, Bulgaria's Bulgargaz and Hungary's MOL Nyrt. (MOL.BU).
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