Bloomberg: Nabucco Faces ‘Terminal Blow’ as Hungary Woos Russia Link

The Nabucco natural-gas pipeline project to ship Caspian fuel to Europe may have been dealt a “terminal blow” as Hungary seeks to attract a rival link planned by OAO Gazprom, Russia’s gas export monopoly.

Mol Nyrt., the country’s largest company by market capitalization, is leaving the 7.9 billion-euro ($10.4 billion) Nabucco project, Hungarian Prime Minister Viktor Orban said yesterday in Brussels.

Nabucco is a joint venture of Mol, Germany’s RWE AG, Vienna-based OMV AG, Bulgargaz EAD, Romania’s Transgaz SA and Ankara-based Boru Hatlari ile Petrol Tasima AS. Backed by the European Union, it has faced repeated delays after struggling to secure fuel sources. It may be scaled down and linked up with the Trans-Anatolia Pipeline, known as Tanap, at the EU’s southern border, Nabucco Managing Director Reinhard Mitschek said last month.

“Mol and Hungary have a link function due to their geographic location, so should Mol really bail out, this would be a potentially terminal blow to Nabucco,” Philipp Chladek, an oil and gas industry analyst at Bloomberg Industries in London, said today by telephone.  MORE