Jun 07 - Eni and Gazprom Sign the Agreement for the South Stream Project

Source Press Release
Company ENI S.p.A. 
Tags Pipelines/ tankers/ distribution
Date June 23, 2007

Eni and Gazprom signed today, in the presence of the Minister of Industry and Energy of the Russian Federation, Viktor Khristenko, and Italy’s Minister for Economic Development, Pierluigi Bersani, a Memorandum of Understanding for the realization of South Stream, a new gas pipeline system which will link Russia to the European Union across the Black Sea.

The agreement is for the implementation of a technical and economic feasibility study of the project and for the necessary political and regulatory evaluations. It establishes the guidelines for the cooperation between both companies for the planning, financing, construction and technical and commercial management of the pipelines.

The South Stream project represents a further step towards the implementation of the strategic agreement signed in November 2006 by Eni and Gazprom.

Following the commercial agreements and the entry of Eni in Russian upstream, this new agreement further strengthens the alliance between Eni and Gazprom and will significantly contribute to improving the security of energy supply for the European Union. The project is particularly relevant in the context of the significant gas shortage which will be experienced by the European Union between now and 2015, as demand increases while internal production decreases significantly.

The transport capacity of South Stream will be defined through feasibility studies in order to optimize costs and on the basis of market analyses that will be carried out in the countries involved as well as in the end markets.

According to preliminary studies carried out by Saipem, costs are comparable with the development of the LNG chain (liquefaction plants, ships and re-gasification plants).

In its offshore section, the South Stream will cross the Black Sea from the Russian coast of Beregovaya - the same starting point of the Blue Stream pipeline - to the Bulgarian coast, with a 900-km pipeline reaching a maximum water depth of more than 2,000 metres.

For the onshore section two different routes from Bulgaria are being studied: a route towards northwest and one towards southwest. Eni and Gazprom will carry out the project using the most advanced technologies in full respect of the strictest environmental criteria.

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