Gazprom to start South Stream construction in 2012

OAO Gazprom has decided to begin construction of the South Stream natural gas pipeline in December 2012, as opposed to 2013, as previously planned. Gazprom will present the updated construction schedule to the board of directors of South Stream Transport AG in February.

South Stream will cross the Black Sea to deliver 63 billion cu m/year of Central Asian gas to southern and central Europe. Intergovernmental agreements are in place between Gazprom and Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia, and Austria to implement the onshore part of the project.

Turkey granted Gazprom permission earlier this month to build South Stream in its waters (OGJ Online, Jan 9, 2012). South Stream shareholders agreed Sept. 16, 2011, that Gazprom would hold a 50% stake in the offshore part of the pipeline, with the remainder divided between Eni 20%, Wintershall Holding GMBH 15%, and EDF 15%.

Shareholders finalized the project’s feasibility study in third-quarter 2011. The study included basic technical decisions on the project with justification of their feasibility, assessment of environmental safety and activities for environmental protection, and economic evaluation of the project, taking into account capital and operating costs.

Contact Christopher E. Smith at chriss@ogjonline.com.

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