Hungarian firm signals walkout from Nabucco

ISTANBUL - Hürriyet Daily News

Ministers of countries that pledge to take part in the Nabucco project are seen signing a deal in the central Anatolian province of Kayseri in this June 2011 photo. AA photo

Mol, the Hungarian partner in Nabucco, has rejected the 2012 draft budget of the European gas pipeline project, increasing concerns over the future of the 4,000 kilometer project.

Financing Nabucco is no longer sustainable, Mol explained to both Nabucco shareholders and the Hungarian government in a statement on April 24.

Ongoing projects by Russian Gazprom and a deal last year between Turkey’s pipeline company Botaş and Azerbaijani Socar to carry Caspian gas to western Turkey are potential alternatives. OVM, the Austrian partner, said Nabucco was still an option but that a shorter line would be considered, according to a Reuters report yesterday. Germany’s RWE, Turkey’s Botaş, Bulgaria’s BEH and Romania’s Transgaz are the remaining partners in the project.

Gazprom the alternative

Mol also said it found Gazprom’s Southern Corridor concept logical and that a re-shaped Nabucco might be connected to this project later. “We are still committed to the diversification of the CEE (Central and Eastern European) energy supply, although as a private independent company we owe our shareholders the highest possible economic justification as well,” it added.

“There are many uncertainties around the Nabucco project that would be hard to ignore. Both the financing background and the gas source are uncertain,” Mol said.

The statement came after comments in Brussels by Hungarian Prime Minister Viktor Orban late April 23. “I am not an expert on this issue but as far as I can see, even the Hungarian company Mol is withdrawing from the entire project,” he was quoted as saying by Hungarian news agency MTI.
Nabucco is in trouble, Agence France-Presse interpreted him as saying. A spokeswoman for Mol told AFP on April 24 that the group would release another statement on the issue later in the day, without giving any more details.

Nabucco, meanwhile, remained non-committal. “The Nabucco shareholder in Hungary is FGSZ, a Mol subsidiary, and we have not had any indication that this will change,” Christian Dolezal, a spokesperson for the company, said in a statement.

The EU project has been plagued by problems, including a lack of potential suppliers, that have repeatedly postponed the start of construction, now set for 2013.

“The management of the project has not been able to find and secure the gas source that can feed the pipeline, therefore the quantity of the available gas and the source of it are still questionable,” Mol wrote on April 24. Mol says the project’s costs have risen since 2003, and “it is still unclear.”

Energy Minister Taner Yıldız responding to question regarding Hungary’s possible exit from Nabucco, said it was obligatory for Turkey to take part in such projects. “The opportunities such projects offer never ends,” he said. “We have mentioned earlier that it might continue under the name of West Nabucco.”