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Serbia ready to start building South Stream pipeline’s section

May 13, 2013, 22:26 UTC+3

Bajatovic expressed hope that the license for commencing construction work in Serbia would be obtained by autumn

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BELGRADE, May 13 (Itar-Tass) - Serbia is ready to start building its section of the South Stream pipeline, Srbijagas Director-General Dusan Bajatovic said.

“All problems are solved” and all conditions are created for commencing work in late 2013, he said on Monday, May 13.

Documents have been prepared, all contracts signed and the final route gas been determined for both the main pipeline and extensions to Croatia and Republika Srpska (Bosnia-Herzegovina), Bajatovic said.

Srbijagas will approve the general pipeline project by June 30, after which tenders will be held for the right to supply pipes and compressors.

Bajatovic expressed hope that the license for commencing construction work in Serbia would be obtained by autumn.

The pipeline may produce the first profit in 2016 and the first payments to the national budget are due in the same year. Initially, they will be used to repay loans. Eventually, they will go to Srbijagas and Russian Gazprom, which are partners in construction of the pipeline in Serbia.

In November 2009, the joint project company South Stream Serbia AG was registered. Gazprom’s share in the joint venture is 51 percent, Srbijagas has 49 percent stake.

On March 27, 29013, Gazprom CEO Alexei Miller signed long-term contracts with the Serbian leadership on the supply of Russian gas to Serbia.

The South Stream Offshore Pipeline will run through the Black Sea from Russia to Bulgaria and have a total length of 930 kilometres. An EIA in accordance with national environmental legislation is being conducted in Russia, Turkey and Bulgaria. In addition, South Stream Transport is undertaking an Environmental and Social Impact Assessment (ESIA) in alignment with the standards and guidelines of international finance institutions. This will involve an ESIA Report for each Sector of the Project and a consolidated document for the entire South Stream Offshore Pipeline to ensure a consistent approach.

The Russian Sector of the Project will have a length of approximately 230 kilometres, running from the landfall at the Black Sea shore to the boundary of the Russian Exclusive Economic Zone. The Russian EIA process was started in July 2012 with the publication of the Terms of Reference, which gave a first description of the subjects that are covered by the draft EIA Report. In November 2012, South Stream Transport commenced the ESIA process for the Russian Sector with the publication of a Russian Scoping Report. Public consultation meetings were held on the Scoping Report in the communities of Varvarovka, Soupsekh and Gai-Kodzor in December 2012.

The EIA and ESIA processes will be finalised before the start of offshore pipe laying in 2014, with the aim of taking the first line into operation by the end of 2015.

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.

The project stipulates for the offshore gas pipeline section to run under the Black Sea from the Russkaya compressor station on the Russian coast to the Bulgarian coast. The total length of the offshore section will be around 900 kilometers, the maximum depth - over two kilometers and the design capacity - 63 billion cubic meters. There are two optional routes for the onshore gas pipeline section: either northwestwards or southwestwards from Bulgaria.

In order to feed the required amount of gas to South Stream, Russia's gas transmission system throughput will be increased through the construction of additional 2,446 kilometres of line-pipe and 10 compressor stations with the total capacity of 1,473 MW. This project has been named South Corridor and will be implemented in two phases before December 2019.

South Stream is scheduled to become operational in 2013. The overall capacity of the marine section of the pipeline will be 63 billion cubic metres a year. Its cost is about 8.6 billion euro.


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