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South Stream’s future depends on Russia-EU agreements, not on Serbia - Prime Minister

June 11, 2014, 22:40 UTC+3 BELGRADE

When asked whether Serbia would continue the construction of the pipeline on its territory, Vucic said it would take time to assess the feasibility of the project

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BELGRADE, June 11 /ITAR-TASS/. The future of the South Stream gas pipeline depends not on Serbia but on agreements between Russia and the European Union, Serbian Prime Minister Aleksandar Vucic said at a joint news conference with German Chancellor Angela Merkel in Berlin on Wednesday, June 11.

When asked whether Serbia would continue the construction of the pipeline on its territory, Vucic said it would take time to assess the feasibility of the project.

“It does not depend on us, but rather on an agreement between Russia and the EU. We have an agreement and a pre-contract signed. Gazprom is the majority owner of NIS, and Serbia is in a specific position. We will look to protect Serbian interests, but it also depends on the interests of Europe. You cannot skip EU countries to reach Serbia,” TANJUG news agency quoted Vucic as saying.

On Monday, June 9, Vucic said the Serbian government had not yet made its decision on South Stream. The statement followed his Deputy Zorana Mihajlovic’s remarks that Serbia had to suspend the project following Bulgaria’s decision to put it on hold.

The first joint of the onshore section of the pipeline in Serbia was welded in Sajkas on November 24, 2013, thus marking a key phase in the construction of the pipeline.

A month ago, State Duma (lower house of the Russian parliament) First Deputy Speaker Ivan Melnikov said after talks with Serbian parliament Speaker Maja Gojkovic that Serbia had reaffirmed the priority of the South Stream gas pipeline project.

“Serbia has adopted a government decision that the South Stream project is a priority,” Melnikov said referring to Gojkovic’s statement. “This is a very important project and nothing can cause Serbia to waive its implementation.”

On June 2, the European Commission announced its intention to suspend the South Stream project in EU countries, primarily Bulgaria, citing several reasons. One is that the Commission has doubts that the project complies with the Third Energy Package. Another reason is that the EU suspects Bulgaria of being in breach of European rules of conducting tenders for infrastructure projects and of giving privileges to Russian and Bulgarian companies.

South Stream will be built across the Black Sea to South and Central European countries to diversify gas supplies to Europe and reduce the dependence on transit countries.

To build the onshore sections of the pipeline, Gazprom has signed agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia, and Austria.

The South Stream Offshore Pipeline will run through the Black Sea from Russia to Bulgaria and have a total length of 930 kilometres. An environment impact assessment (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.

South Stream, initially conceived ENI and Gazprom, later joined by Electricite de France and German Wintershall AG, will eventually take 30 billion cubic metres of Russian natural gas a year to southern Europe.

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 kilometres, the maximum depth - over two kilometres and the design capacity - 63 billion cubic metres. There are two optional routes for the onshore gas pipeline section: either northwestward or southwestward 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.

The offshore section of the pipeline, which will run in part along the seabed and reach the maximum depth of 2,200 m, will be 931 km long. Each of the four parallel strings of the pipeline will consist of 75,000 pipes, each 12 m long, 81 cm in diameter, 39 mm thick and weighing 9 tonnes.

The construction of South Stream started on December 7, 2012 is scheduled to be completed by 2015. The overall capacity of the marine section of the pipeline will be 63 billion cubic metres a year. Its cost is about 16 billion euro. The pipeline will go on onshore in the area of the Bulgarian city of Varna.

Gazprom’s share in the joint venture South Stream Transport B.V., which has been created to plan, build and operate the pipeline, is 50%, Italian ENI has 20%, French EDF and German Wintershall Holding GmbH each holding 15%

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