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MOL says continued financing of Nabucco pipeline unsustainable

Hungarian oil and gas company MOL believes the continued financing of the Nabucco pipeline project is unsustainable and thus did not approve the project company's 2012 budget, MOL told MTI.

Industry experts told MTI that MOL's failure to approve the budget meant in practice that it would not give any more money to the project company. They said if the current shareholders do not exercise their pre-emption right, MOL could sell its stake in the project company to Bayerngas, which is in talks on becoming the seventh member of the Nabucco consortium.

MOL said it had raised its concerns about the implementation of the Nabucco project in its current structure and with its current management in a number of different forums over the past year and a half. It added that costs and the sources of supply for the pipeline were still unclear.

A spokesman for European Commissioner for Energy Gunter Oettinger said earlier that MOL's possible exit from the project would not be a negative development if a new, capital-strong partner could be found.

Nabucco Gas Pipeline International was established in the summer of 2004 to plan and build a pipeline to deliver gas from Central Asia to Europe, reducing Europe's energy dependency on Russia.

In addition to MOL, the company's owners include Germany's RWE, Austria's OMV, Romania's Transgaz, Bulgaria's Bulgargaz and Turkey's Botas.