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Russia’s Gazprom revives plans to build South Stream to Austria

MOSCOW, April 22. /ITAR-TASS/. Russia’s gas producer Gazprom considers resuming the construction of the South Stream gas pipeline to Austria.

Gazprom CEO Alexei Miller met with Austria’s OMV Director-General Gerhard Royce on Tuesday, April 22, to discuss the possibility of building am extension of the pipeline to Austria.

“With a view to optimising the South Stream project and considering Gazprom’s current portfolio of contracts, we have agreed with the Austrian side’s proposal to consider such a possibility within the framework of the effective inter-governmental agreement in parallel with the ongoing work to build the gas pipeline in Slovenia,” Miller said.

On March 4, ITAR-TASS quoted its own sources as saying that Austria had made the decision to rejoin the South Stream project and that OMV and Gazprom were negotiating a contract for the supply of natural gas by the South Stream pipeline in the amount of 6 billion cubic metres a year.

Initially, Austria supported the South Stream project and in 2010 OMV and Gazprom signed a basic agreement on cooperation on the South Stream project, which envisioned additional long-term gas supplies to Austria in the amount of 2 billion cubic metres. However later OMV joined the competing Nabucco project for the supply of gas from CIS countries to Austria and Germany. After the project had been suspended, Gazprom resumed discussing Austria’s participation in the South Stream project, but Italy remains its final destination for the time being.

Unlike Nord Stream, which runs entirely along the seabed and thus does not fall under European legislation, 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 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.