Two UAE energy companies have signed partnerships with a pair of European firms to boost development of gasfields in Kurdistan to kick-start a US$10 billion (Dh36.7bn) pipeline project to Europe. The ambitious Nabucco gas pipeline to transport gas from Iraq, Iran and the Caspian region across Turkey to markets in Europe is seen as a hedge against over-reliance on Russia. Today's agreement calls for a series of equity swaps and purchases between Dana Gas and Crescent Petroleum of the UAE, with OMV, the Austrian oil firm, and MOL, a Hungarian energy group.
OMV will pay US$350 million (Dh1.2billion) for a 10 per cent stake in Pearl Petroleum, a subsidiary of Dana and Crescent in northern Iraq. Dana and Crescent will each take a 3 per cent stake in MOL, and give the Hungarian firm an additional 10 per cent slice of Pearl in return. "Our joint project in the Kurdistan Region now has the full potential of linking the region's significant gas reserves to Europe by pipe for the first time," said Badr Jafar, the executive director of Crescent Petroleum.
OMV and MOL are developing the pipeline in partnership with Germany's RWE, Romania's Transgaz, Bulgarian Energy Holding and the Turkish pipeline company, Botas. But even with the new agreement, the Nabucco project faces serious challenges. Azerbaijan was supposed to be a major supplier to the project, but in March it signed a preliminary agreement to sell its gas to Russia instead. Turkey, too, has thrown up roadblocks as it sought high gas transport fees and the right to buy up to 15 per cent of gas from Azerbaijan at prices below European market rates.
cstanton@thenational.ae
