Gazprom and partners sign South Stream project deal
Russian major gas producer Gazprom and its partners in the South Stream gas pipeline that runs under the Black Sea to Europe have signed off on the final investment to launch the 16 billion euro project on Thursday.
“The members of the board, including representatives of Gazprom, Eni, EdF and BASF SE have discussed key issues and made a final investment decision on the offshore section of the South Stream project,” the statement says.The parties confirmed registration of the company South Stream Transport BV with headquarters in Amsterdam. The construction of the undersea section of the pipeline is due to begin on December 7 as planned.The offshore section of the pipeline from Russia to Southern Europe will stretch 900 km. There are optional routes for South Stream along the Black Sea seabed: the north-western route; towards Slovenia and Austria via Bulgaria, Serbia and Hungary, and the south-western route; towards Greece and Italy.On Tuesday Gazprom signed a deal with a Slovenian counterpart to build the Slovenian stretch of the South Stream gas pipeline.The supply of natural gas to Europe is 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, but the total cost could double to $32 taking into account the onshore sections, experts estimate.The South Stream pipeline was 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 supply to Europe consumers, avoiding transit countries such as Ukraine.