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13 Nov, 2012 12:25

Russia signs South Stream deal with Slovenia

Russian gas major Gazprom has signed a final deal with a Slovenian counterpart to build the Slovenian stretch of the South Stream gas pipeline project to deliver gas from Russia under the Black Sea to Europe.

The deal was signed in the presence of Russian Prime Minister Dmitry Medvedev by Gazprom CEO Alexei Miller and the General Manager of Slovenia’s transmission system operator Plinovodi Marjan Eberlinc. The Russian company has signed similar deals with Hungary and Serbia.In August Russia and Bulgaria inked a protocol on the implementation of the South Stream project. The paper specifies where the future gas pipeline will be connected to Bulgaria’s gas transportation system.The South Stream pipeline is designed to diversify Russian gas routes to Europe and to compete with the rival EU-backed Nabucco pipeline project. The South Stream gas pipeline is set to provide a direct connection between suppliers and consumers, thus avoiding transit risks and guaranteeing a continuous energy supply for Europe.There are several optional routes for the South Stream along the Black Sea seabed: the northwestern route; towards Slovenia and Austria via Bulgaria, Serbia and Hungary, and the southwestern route; towards Greece and Italy.The construction is expected to begin by the end of 2012. Deliveries of natural gas to Europe are expected to start in the first quarter of 2016. By 2018 the project is expected to deliver up to 63 billion cubic meter of natural gas to European consumers. The cost of South Stream, including the pipeline’s overland sections, is estimated at $16 billion.