MOL stake in Nabucco at risk

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BUCHAREST, Romania, July 31 (UPI) -- The stake held by Hungarian company MOL may be diluted if it backs away from financing the planned version of the Nabucco pipeline, an official said.

The BP-led consortium working in the Shah Deniz II natural gas project in the Azeri waters of the Caspian Sea in June selected Nabucco West as a potential project to transport natural gas to Europe.

Nabucco West is a smaller version of the original $10 billion Nabucco pipeline.

Sorin Keszeg, director of international relations for Nabucco partner and Romanian energy company Transgaz, said a goal of getting $3.6 million from each consortium member might not happen without MOL's support. MOL, he said, balked on financing for Nabucco while it waited for the BP group to vet various pipeline projects.

"Nabucco's board of directors will meet in Vienna next week to decide on the capital increase, aimed at securing the financing needed to go ahead with the project," he told Bloomberg News. "MOL may reconsider its position on the planned capital increase, since Shah Deniz partners said they favor Nabucco. If MOL doesn't, its stake will be diluted."

So-called Nabucco Classic, the larger version of the pipeline envisioned for southern Europe, faced some level of revolt because of the economics involved and the lack of firm supplier agreements.

By next year, the BP-led group should decide between Nabucco West and the Trans-Adriatic Pipeline as the conduit for Azeri natural gas.