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Gazprom, Plinovodi to set up JV for South Stream

According to the agreement, the joint venture has to be created in March of this year.

LJUBLJANA, February 27 (Itar-Tass) —— Russia’s Gazprom and Slvenian Plinovodi are ready to set up a joint venture for the construction and subsequent operation of the Slovenian section of the South Stream gas pipeline.

The agreement was reached on Monday, February 26, between Plinovodi Director Marjan Eberlinc and Gazprom CEO Alexeri Miller, who is in Ljubljana on a working visit.

According to the agreement, the joint venture has to be created in March of this year.

Plinovodi is convinced that the implementation of the South Stream project will contribute to the future energy policy and ensure reliable gas supplies to Europe and their diversification.

Gazprom plans to start building the South Stream gas pipeline in December 2012 and has updated the schedule after Turkey gave permission in December 2011 for the construction of the pipeline in its economic zone.

“We are ready to start the construction in December 2012,” Miller said.

Gazprom has completed a feasibility study for the project that includes sections passing through Bulgaria, Serbia, Hungary, Slovenia, extensions to Croatia and Serbia, and a pipeline to Greece.

“The work on the marine part of the South Stream, project has been finished, and the drafting of national feasibility studies has also been completed in the European countries participating in the project,” Miller said earlier.

The implementation of the project “is proceeding strictly as scheduled and the first gas will be supplied in December 2015”, he said.

Miller stressed, “There is a 100 percent guarantee for the pipeline throughput.”

South Stream, which will be jointly built by Gazprom and ENI, will eventually take 30 billion cubic metres of Russian natural gas a year to southern Europe. Analysts have said that the project will cost around 10 billion euro, or 15.82 billion U.S. dollars.

South Stream is scheduled to become operational in 2013. The 900-kilometre-long undersea section of the pipeline will run from the gas compressor facility at Beregovaya, on Russia's Black Sea coast, near Arkhipo-Osipovka, towards the city of Burgas, in Bulgaria. The sea's maximum depth on this route is 2,000 metres.

South Stream is a strategic project for Europe's energy security and should be implemented by the end of 2015. Work is currently underway to draft a feasibility study for the marine section across the Black Sea and the surface section running through transit countries.

The overall capacity of the marine section of the pipeline will be 63 billion cubic meters a year. Its cost is about 8.6 billion euro.

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