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Cost of South Stream gas pipeline off-shore section can climb over €10 billion

October 09, 2014, 20:56 UTC+3 AMSTERDAM
Spokesman for the South Stream Transport B.V. said exact figures will not be known until all the key contracts on supplies of pipes and construction works are concluded
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© ITAR-TASS/Ruslan Shamukov

AMSTERDAM, October 9. /TASS/. The cost of marine section of the South Stream gas pipeline will become known only after all the key contracts are concluded, the spokesman for the South Stream Transport B.V., Jasper Jansen, told TASS on Thursday.

Jansen said that according to the latest estimates, cost of the off-shore line will climb over ten billion euro although exact figures will not be known until all the key contracts on supplies of pipes and construction works are concluded as they constitute a major part of the project.

Earlier, TASS reported on January 29 that the pipes would be made and supplied for the first line of the South Stream pipeline by German Europipe (50% of the pipes), Russia's United Metallurgical Company from Russia (35%), and Severstal's Izhora Pipe Mill in Russia (another 15%).

On March 14 Marubeni-Itochu and Sumitomo (40% of the pipes), OMK (35%) and Severstal (another 25%) were determined as suppliers for the second line of the South Stream.

In April the South Stream Transport concluded contracts on construction of the second line of the off-shore section with Swiss company Allseas Group to lay pipelines on the bed of the Black Sea and with Italian company Saipem to provide supporting works.

The South Stream Offshore Pipeline will be made up of four parallel pipelines of 931 kilometers each, with a diameter of approximately 813 mm and steel walls 39 mm thick.

The South Stream Offshore Pipeline will run through the Black Sea from Russia to Bulgaria and have a total length of 930 kilometers. 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.

Infographics Russian gas in Europe Russian gas in Europe
One-third of gas consumed in EU comes from Russia. Infographics ITAR-TASS
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 kilometers 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 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.

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