Friday, May 29, 2009

Romania may consider rival pipeline if Nabucco stalls

BUCHAREST, May 28 (Reuters) - Romania is committed to the European Union-backed Nabucco gas pipeline, but it will consider other projects if talks do not push forward, leaving a door open to a rival Russian project, a senior official said on Thursday.

The Nabucco pipeline has gained impetus following the gas price row between Russia and transit country Ukraine in January, which left many European countries without gas for two weeks.

But funding, the sourcing of natural gas and disagreement between consortium members have weighed on the project, which has had to push back some of its target dates.

The pipeline is expected to start pumping gas in 2014 if an agreement on the 7.9-billion-euro project can be reached as expected in June. But the agreement hinges on whether Turkey drops a demand to keep 15 percent of the gas for resale.

Meanwhile, Russia is struggling to accelerate its South Stream pipeline, due to start in 2015.

"Romania can afford to wait, unlike other countries it has proved in the last winter it could handle the crisis ... but it cannot wait long," deputy Economy Minister Tudor Serban told an energy seminar.

"If Nabucco does not materialise ... it is clear that (Romania) will enter talks for a project, I don't want to say which one now."

Nabucco shareholders are Austria's OMV (OMVV.VI), Hungary's MOL MOLB.BU, Romania's Transgaz TGNM.BX, Bulgaria's Bulgargaz, Turkey's Botas and Germany's RWE (RWEG.DE).

Prime Minister Emil Boc said on Thursday that while Nabucco remains a priority, Romania will be flexible over joining other projects, without specifically pointing to South Stream.

"Romania has the strategic advantage of holding an important part in any one of them (European projects), which is why Romania will have a flexible policy, being able to participate in other European projects," Boc said.

Earlier this week, Romanian President Traian Basescu said Russia and the EU must increase cooperation on major issues despite distrust fuelled by Russia's military action in Georgia and controversy over gas supplies. (Reporting by Luiza Ilie; Editing by Peter Blackburn)

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