UPDATE 1-Nabucco upbeat on Azeri gas, shuns ITGI merger

* Says merger with ITGI not impossible but not necessary

* EU officials have been pushing projects to coordinate

* Nabucco sees 16 bcm gas supply from big Azeri gas field

(adds quotes, details)

By Sylvia Westall

VIENNA, Feb 18 (Reuters) - The Nabucco consortium sees no need to merge its gas pipeline project with a smaller one to succeed but understands European calls to coordinate energy policy, its manager told Reuters on Friday.

Reinhard Mitschek also said that Nabucco was closer to securing a supply agreement for Azeri gas after a meeting to discuss volumes in Baku on Thursday.

Officials at the European Commission are urging Nabucco and the Interconnector Turkey-Greece-Italy (ITGI) to enter talks about merging their separate projects, Reuters reported on Thursday. [ID:nLDE71G0TK]

"If (Nabucco) shareholders would come to the conclusion that it is useful or that it would bring added value then why not, but (a merger) is not necessary to realise the Nabucco concept," Reinhard Mitschek said in a telephone interview.

"(Amounts) to ITGI and to other branch lines and to other regions are possible and expected," he said.

He suggested smaller pipeline projects like ITGI could book capacity through Nabucco.

"Every market player can participate in the second part of the open season process for capacity where third-party shippers can take part," he said.

ESSENTIAL AZERI GAS

Nabucco and ITGI are two strategic gas pipeline projects which aim to secure supplies from Central Asia to Europe, the world's second-biggest gas market.

Nabucco is backed by the EU, but any strategic changes would have to be agreed by its six shareholders -- 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).

The EU's main means of diversifying suppliers is by tapping into the Caspian region's gas fields, initially in Azerbaijan.

The consortium controlling the next wave of Azeri gas -- from the Shah Deniz II field, co-led by BP (BP.L) and Statoil (STL.OL) -- is expected to choose a buyer and transporter by June.

The Nabucco consortium met with officials overseeing Shah Deniz II on Thursday who told them 16 billion cubic metres of gas would be available for Nabucco. They are working on details of a possible supply agreement, Mitschek said.

"A follow up meeting will happen very soon."

"The Southern Corridor is more or less Nabucco because whatever gas will then be taken off in different regions...will use Nabucco across Turkey. I assume that we will have the whole Shah Deniz II quantities in Nabucco plus gas quantities beyond that."

The 7.9 billion euro Nabucco project, which aims to transport up to 31 bcm per year from the Caspian region and Middle East, expects to start its open season process in the second half of this year.

Other potential gas supplier include Turkmenistan and Iraq. Construction will begin in late 2012 and it will start transporting its first gas at the end of 2015.