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South Stream enters final straight as players eye 2010 construction start

Ahead of President Medvedev’s signing of key agreements with Serbia this week, Turkey has OK'd the start of South Stream feasibility studies, with key players looking at a construction start late next year.

At a meeting with his Italian and Russian counterparts, in Milan, Turkish Energy Minister Taner Yildir brought south stream another step towards fruition – Turkish approval for the feasibility study to commence in its waters. The announcement came in the wake of a Prime Ministerial meeting in the Turkish capital in August.

“We are here today to realize the decision made on the sixth of August in Ankara at the meeting of the three prime ministers. South Stream is one of the priority projects.”

Turkey's go ahead gives the massive project real impetus, ahead of President Medvedev’s signing of construction agreements with Serbia on Tuesday. Eni CEO, Paolo Scaroni, says construction could be underway before 2011

“The feasibility study on South Stream will be ready at the beginning of next year and will cover several areas, with the technical to start with. To cross the Black Sea is a complex thing to do. Than we have to decide about the economics of the project and governance. Several issues remain before we take the final investment decision which is expected some time next year. The construction can begin at the end of next year.”

Russian deputy Prime Minister Igor Sechin, added that interest will mount from here on in.

“The closer we get to the physical construction of the project, the more partners we will see. And it‘s good. We are inviting, and will work with, everyone. And what Turkish energy minister Yldir said today about the official start of the feasibility study being the concrete start of work – Thats right! And the faster we work – the more partners we will have.”

Also signed at Mondays meeting was a memorandum of understanding on the Samsun-Ceyhan oil pipeline, which will see Rosneft, Transneft and Sovkomflot join with Calik of Turkey and Italy’s Eni to boost supply capacity.

With the weather suggesting another harsh winter for Europe, progress on both the South Stream gas pipeline and the Samsun Jeihan oil pipeline brings closer the realisation of new routes for supplying Russian energy resources to Europe – without disruption.