South Stream pipeline no threat to Nabucco - extended

Energy Trade

Russia's South Stream pipeline project is not politically motivated and does not threaten Nabucco, Europe's $6 billion gas pipeline project linking the energy-rich Caspian to Europe, bypassing Russia, the Gazprom head said Friday. Medvedev re-elected chairman of Gazprom board of directors. 

The Russian energy giant and the Italian gas company Eni SpA signed June 23 a memorandum to construct the South Stream gas pipeline, which will stretch for 900 kilometers (560 miles) along the seabed of the Black Sea from Russia to Bulgaria, reaching a maximum depth of over 2 kilometers (1.2 miles). “If the Nabucco project is economically viable, has a confirmed demand for gas and a corresponding resource base, nothing can hamper it,” Alexei Miller said in an interview with the business daily Kommersant, adding that Gazprom could join the project in the future.

The Nabucco pipeline will run from Turkey through Romania, Bulgaria, and Hungary to Austria, from gas fields in Iran and Azerbaijan. Gazprom's deputy CEO Alexander Medvedev said previously other countries could join the project, adding that the possible participation of a Bulgarian company was desirable, but that the form and extent of the involvement remained a subject for discussion. Bulgarian President Georgi Parvanov said at a meeting with President Vladimir Putin on the sidelines of the recent Balkan energy summit in Zagreb that Bulgaria “is ready to join the South Stream project.” Medvedev said that third parties would be able to participate in the construction of land-based stretches of the pipeline, while Gazprom and Eni would exclusively share equal stakes in the pipeline's underwater section.

The Nabucco consortium is owned by Austria's OMV, Hungary's MOL, Turkey's Botas, Bulgaria's Bulgargaz, and Romania's Transgaz. Construction of the 3,300-kilometer pipeline could begin as early as 2008, with operation starting in 2012. The pipeline's transit capacity will be 25.5 billion cubic meters per year.

Russian First Deputy Prime Minister Dmitry Medvedev was re-elected chairman of the board of directors of state-controlled energy giant Gazprom at an annual shareholders meeting Friday. The shareholders re-approved the other members of the board of directors, including Economic Development and Trade Minister German Gref, Industry and Energy Minister Viktor Khristenko, and the president's envoy for international energy contacts Igor Yusufov, as well as CEO Alexei Miller.

Medvedev and the other first deputy premier, Sergei Ivanov, both President Vladimir Putin's close associates, are viewed as possible front-running presidential hopefuls in next year's elections. Both have received a lot of publicity recently, overseeing multi-billion-dollar projects to improve living standards in the country, and promote the hi-tech sector aimed at cutting dependence on mineral resources, Russia's key export commodity. (rian.ru)
 

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