The know-how, the good transport network and a wide energy market are Romania’s best cards in the Nabucco project

HotNews.ro: There is a lot of talking about Nabucco these days, especially after the signing of the contract for South Stream. Is South Stream a competitor for Nabucco in the south-eastern Europe?

Reinhard Mitschek: We know that the Russians will promote South Stream and it´s normal that countries like Bulgaria or Greece will contribute, once South Stream will be realized. But it is not a competition to Nabucco. Nabucco different gas sources than South Stream – which has Russian gas source. Nabucco has sources from Central Asia, in the Middle East and potentially -, as add on – , Russian gas. Then the projects have a different end user markets: South Stream is mainly Italy, for Nabucco is south-east Europe, Austria, Germany, Italy, Czech Republic. Due to the fact the pipeline will end up in Baumgarten, near Vienna,we can easily swap gas to the other hubs in Europe. I do not see a competition between these two projects.

HotNews.ro: Nabucco is not enough to resolve the Europe’s needs for gas, to assure the European gas supply security. In the meantime, there is this fear of Russian involvement in projects like this, in the south-eastern Europe.

Reinhard Mitschek: Nabucco could transport 30 billion cubic meters of gas per year, the European consumption for 2020 is expected to be 700 billion cubic meter per year. Based on that overall consumption Nabucco will cover no more than 6-7% of the European gas consumption. That means standing alone Nabucco could not secure the security of gas supply in Europe. Therefore it´s necessary to develope additional projects, be it pipelines or LNG. This is the reason why there is no competition between Nabucco and South Stream. We don´t have to say either South Stream or Nabucco, or either Nabucco or South Stream. I think we need both.

OMV has reliable business relations and gas supply contracts with Russia for 40 years, without any interference. But several Eastern European countries have an even bigger need of Russian gas than Austria, or Germany, or France, or Italy. Somewhere around 75 to 80% of their natural gas supply comes from Russia. It’s reasonable that countries like Bulgaria, Romania or, Hungary would like to see alternatives now.

HotNews.ro: Gaz de France has dropped the intention of being a partner of Nabucco, because of the fierce opposition of Turkey. But it is possible to be involved only in the Romanian sector of Nabucco, as president Basescu has said during the visit of French president in Romania, Mr. Sarkozy? Will the partners consider such an idea and accept such an idea?

Reinhard Mitschek: In our concept all Nabucco shareholders have the same share on the national sectors. Nabucco will be managed and will work on the principle of a one stop shop.That means a shipper can contract transport capacity with Nabucco Gas Pipeline International from the very beginning of Nabucco to the very end. Therefore it was never planned to have a variation of share holdings in different national sectors of Nabucco. That’s for the time being the case and I think this will not happen in the future.

HotNews.ro: The South-European partners could think of alternative ways to finance their sector. Can this be a drive to have others on national sectors, as Mr. Basescu said about Gaz de France? How was this statement seen by the partners?

Reinhard Mitschek: I don’t know what the two presidents discussed and that’s why. I cannot give interpretation of what was written in the press about that meeting. Our Nabucco finance plan says, that 30% will be financed by the shareholders, and 70% by banks and credit agencies. There is no question of financing national sectors, but it is an independent project financing.

HotNews.ro: Will indeed the first dig of Nabucco start in 2010? Because we are speaking about nabucco for so many years and – even if there were phases programmed and a roadmap – it seems Russian are moving faster.

Reinhard Mitschek: We are now in the development phase and we are negotiating the exemption topics with the European Commission and with national regulators. This has taken more than one and a half year. We started discussion with the regulators and the Commission in 2006 we are now in February 2008, and we have ongoing discussions on that. We all have to realize that such a complex project was never realised before: to cross five countries, to cross five borders, to consult 5 national authorities. All the political groups and all regulators are keen to support it. But there are different national regulations, national laws and even if we get a big support it takes time.We want to develop the project properly and therefore it takes time That’s why we will start construction in 2010.

HotNews.ro: But the Russian moving faster and their involvement into a similar project in the region didn’t speed up things? Some say it must speed up things in Nabucco.

Reinhard Mitschek: We cannot say if Russians are moving faster. I do not know detailed plans for South Stream. I read the press releases, but I`ve never seen a business plan, estimated costs, maps, time schedules. But I do know the Nabucco project in detail. I know that we are in very good development phase and, we are making progress.We have the first exemptions from Austria, Hungary and Bulgaria, Romania will follow soon.

HotNews.ro: When do you expect it? Is there a deadline?

Reinhard Mitschek: No, there is no deadline. It was announced for February or-March 2008. I think it will come very soon.

HotNews.ro: What is the advantage Romania brings to the project?

Reinhard Mitschek: First of all, the Romanian companies are well advanced and have a very good know-how., Transgaz has a very good transmission system operator, and that brings a lot of ideas and know-how into the project. Romania is a big market for energy and gas. From OMV perspective, Romania is an important country based on our cooperation with Petrom. We dont’ want to miss Romania in our consortium.

HotNews.ro: Is this the final number of partners in the project, or in the future it is possible to have more?

Reinhard Mitschek: For the time being we have six partners, we just had the closing with our sixth partner, RWE. We are focusing now in speeding up the project development. As soon as potential partners will appear with good ideas, an interesting concept,and added value to the project, the shareholders will discuss and decide if we can invite a seventh partner into the consortium. This is a decision to be discussed by the shareholders when it appears.

HotNews.ro: There were signs that Gaz de France wants to be involved in South Stream project just to force Nabucco partners to take it into account for Nabucco actually. Has GdF chances to be added somewhen in the future?

Reinhard Mitschek: It’s no secret that the shareholders know that Gaz de France could bring added value into consortium. But this discussion is not on the table today I don’t know the strategy of Gaz de France so I don´t want to give interpretations on that.

HotNews.ro: An american analyst said that Nabucco partners should not let themselves impressed by Russia and make it part of the project. He says either by being a source of gas or otherways, Russia will try to be a part of Nabucco. How does the partners see this, do you have any signs that this situation is real?

Reinhard Mitschek: We are in the development phase of the project. You can imagine we get a lot of advice. I think the shareholders took all the right decisions untill now and I am convinced and confident the shareholders will take the right decisions in the future, to speed up the project, to realise the project.

HotNews.ro: But you are taking into the account the Russian gas supplies, you’ve told us so.

Reinhard Mitschek: Yes, this was a topic I mentioned several time: we will not exclude any gas quantities. We will not have Russian gas in Nabucco as a single gas source, we will have Russian gas as an add on, to alternative sources and we will not exclude anybody from transporting gas or feeding gas into the pipeline.