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7 Apr, 2009 06:12

Gazprom to bring Blue Stream to Italy

Gazprom has tightened its grip on Europe's gas supply after Rome agreed to extend the vast Blue Stream pipeline to Italy, as Italian Economy Minister Claudio Scajola flagged likely routes.

The Italian economy Minister outlined the routes which will bring Blue Stream to Italy. In Moscow to promote trade links, he says experts are deciding an end point of either Brindisi in the South, or Trieste in the North.

“Experts are working out the volumes for two branch pipelines. One will go through the narrowest point of the Adriatic Sea to the south of the country, and the other pipeline will extend to northern Italy. We could choose both routes, or one of the two.”

In the EU Italy has become Gazprom's chief lobbyist. Prime Minister Berlusconi blasted Brussels for leaving Russia out of a deal to upgrade Ukraine's gas pipelines. And Rome supports direct access for Gazprom to European consumers.

Ronald Smith, Head of Research at Alfa-Bank, says Moscow is successfully playing divide and rule.

“Gazprom is good at doing that to some extent, and also it does indicate Europe does have disparate interests. In the case of Italy they are looking to diversify their own gas supplies, to more than just North Africa and LNG.”

But Gazprom knows Italy's support is not enough. The firm's mobilising an international corporate coalition including Germany's E.On, Italy's Eni and Gaz de France, to fight unfriendly EU decisions.