* Media speculation over merger of rival pipelines
* OMV says press reports show there is interest in Nabucco
By Selcuk Gokoluk
ANKARA March 18 Austria's OMV (OMVV.VI) denied
speculation on Thursday that talks were being held on combining
a Russian natural gas pipeline with its EU-backed rival, both of
which aim to deliver gas to Europe.
The price tag for Russia's South Stream pipeline is expected
to be much higher than previously expected while analysts have
questioned whether a predicted gas glut seen until 2015 and weak
growth expected thereafter will leave room for both pipelines.
Russian partner ENI's (ENI.MI) chief executive officer Paolo
Scaroni was quoted in a media report last week as saying
combining the South Stream pipeline with the Nabucco pipeline
project would save time and money.
But Nabucco partner OMV's head of gas and power Werner Auli
said there were no ongoing discussions on a merger.
"We recognise that (the media report) shows very serious
interest in the Nabucco project. There are no ongoing
discussions about merging the projects," Auli told reporters at
an energy conference in Turkey.
Analysts expect Russia's South Stream pipeline project to
cost tens of billions of dollars as constructors lay pipeline
across the bed of the Black Sea to bypass Ukraine whose past gas
rows with Moscow have cut off supplies to Europe.
The 7.9 billion euro Nabucco pipeline was conceived to cut
Europe's dependence on Russian natural gas, which makes up 25
percent of the continent's gas supplies, but has yet to secure
solid supply agreements from potential suppliers.
Approximately 70-80 percent of the Nabucco's cost is
expected to be met through financing, and international lenders
such as the European Investment Bank have expressed possible
interest in financing the project.
A Russian Gazprom official was quoted earlier this year as
saying that talks were expected to start soon with banks to
finance the South Stream, which plans to deliver as much as 63
billion cubic metres (bcm) of gas, but no financial details were
The Nabucco project, which aims for a capacity of 31 bcm,
has said it expects to start transporting gas by 2014, one year
ahead of the South Stream target to become operational in 2015.
The Nabucco consortium includes OMV, Hungary's MOL
MOLB.BU, Romania's Transgaz TGNM.BX, Bulgaria's Bulgargaz,
Turkey's Botas and Germany's RWE (RWEG.DE)
(Writing by Thomas Grove; editing by James Jukwey)