KALININGRAD, October 4. /TASS/. Russia hopes construction of the South Stream gas pipeline will be resumed after the European Commission’s new structure has taken shape and a new head has been appointed, Russia’s Energy Minister Aleksandr Novak told reporters on Saturday.
When asked about a possibility of resuming work on the South Stream, Novak replied that the project had not been cancelled.
“Inter-governmental agreements that have been signed are valid and in effect,” the minister said adding that “nobody has cancelled them and they cannot be terminated unilaterally.”
“The project is being implemented,” he said.
“Now there are certain problems with the European Commission as the working group that we have jointly set up suspended the work on drawing up an instrument for using the pipeline,” Novak said. “But we are hopeful that after the European Commission’s structure takes shape and its new head is appointed, we will re-start the work.”
South Stream is Gazprom's global infrastructure project designed to build a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe in order to diversify natural gas export routes and eliminate transit risks.
The construction of the South Stream pipeline started in late 2012. Under the project, the first deliveries are due in 2016 and the pipeline is expected to become fully operational in 2018.
Last year, the European Commission urged to review bilateral intergovernmental agreements between Russia and EU countries to ensure that they comply with the Third Energy Package, which requires the separation of gas production, transportation and sale to prevent gas suppliers from dominating the infrastructure.
Energy Minister Alexander Novak said on Saturday, that an agreement on Russian gas supplies to China by the western route may be reached before the end of the year.
“There is no rigid deadline. Gazprom and CNPC are engaged in negotiations. As soon as the price and the terms of pipeline construction and gas supplies are agreed, we will be able to speak about this more specifically,” he said.
“We hope that this can be done before the end of the current year if everything goes well and the companies come to agreement,” the minister said.
Novak said that the negotiators were working on this in real-time mode.
In May 2014, Gazprom and China National Petroleum Corporation (CNPC) signed a 400 billion U.S. dollar contract for the supply of Russian pipeline gas to China. Under the contract, Russia will supply 38 billion cubic metres of gas a year for 30 years.
CNPC is China’s largest petroleum company wholly-owned by the state and is one of the world's leading integrated oil and gas production companies.
In October 2009, Gazprom and CNPC concluded the Framework Agreement on the major terms and conditions of natural gas supply from Russia to China. The Agreement stipulates annual exports of up to 68 billion cubic metres of gas to the Chinese market. In September 2010 the Extended Major Terms of natural gas supply from Russia to China were signed.
In March 2013, Gazprom and CNPC signed the Memorandum of Understanding for cooperation between the two companies in pipeline gas deliveries to China via the eastern route.
In September 2013, Gazprom and CNPC inked an agreement determining major terms and conditions of pipeline gas supply from Russia to China via the so-called eastern route, which will transport 38 billion cubic metres of Russian gas to China.
The western route will deliver West Siberian gas to China from 2019.
Novak said, that the date of the next trilateral gas meeting between Russia, the European Union and Ukraine will be named on October 7.
“We have agreed with the European Commission and Mr. (EU Energy Commissioner Guenther) Oettinger that we will continue working until October 7 to coordinate a draft protocol decision of the meeting held on September 26 and determine the date of the next round of international consultations on the 7th (of October),” he said.