Expert confirms problems with South Stream in Turkey.

20/7 Tass 301

MOSCOW, July 20 (Itar-Tass) —— National Energy Security Fund Director-General Konstantin Simonov confirmed problems with the South Stream gas pipeline project in Turkey.

He said on Wednesday, July 20, that Turkey has so far not given permission for building the pipeline in its territorial waters.

Simonov said the pipeline would have four extensions, each of which will transport 15 billion cubic metres of gas a year.

Russia “does not understand the reasons behind the refusal to give the permission”, Vice Prime Minister Igor Sechin said after talks between President Dmitry Medvedev and Turkish Prime Minister Recep Tayyip Erdogan in mid-March 2011.

“On the one hand, our Turkish partners say that Gazprom has not presented economic proofs for the project, which it cannot present because it has been allowed to start surveying work only from May 31,” Sechin said.

“This is subject to negotiation,” he said, adding that President Medvedev had instructed him to continue the talks with Turkey.

A general feasibility study for the South Stream project will be completed by October, Gazprom CEO Alexei Miller said earlier.

“The work on the marine part of the South Stream, project has been finished, and the drafting of national feasibility studies has also been completed in the European countries participating in the project,” Miller said at a presentation of the project in late May.

“A general feasibility study for the project will be ready by October,” he said, adding that the implementation of the project “is proceeding strictly as scheduled and the first gas will be supplied in December 2015”.

Miller said, “There is a 100 percent guarantee for the pipeline throughput.”

South Stream, which will be jointly built by Gazprom and ENI, will eventually take 30 billion cubic meters of Russian natural gas a year to southern Europe, with Greece becoming a transit state on the southern arm of the pipeline pumping gas to Italy.

Analysts have said that the project, which aims to link Gazprom’s Siberian gas fields with Europe and is seen as a competitor to the EU-backed Nabucco pipeline, will cost around 10 billion euro, or 15.82 billion U.S. dollars.

The projected South Steam gas transit pipeline starts at the Beregovaya compressor station at the Russian Black Sea coast. It would run through the Black Sea to the Bulgarian port of Varna, where it splits – the southwestern pipe would go to southern Italy via Greece, whereas the northwestern route would go through Serbia to northern Italy, possibly including Croatia, Slovenia, Hungary, and Austria.

South Stream is scheduled to become operational in 2013. The 900-kilometre-long undersea section of the pipeline will run from the gas compressor facility at Beregovaya, on Russia’s Black Sea coast, near Arkhipo-Osipovka, towards the city of Burgas, in Bulgaria. The sea’s maximum depth on this route is 2,000 metres.

On the ground the pipeline will split. One (southwestern) branch will be laid across Bulgaria and Greece and the Adriatic Sea towards Brindisi, in Italy, and the other (northwestern one) may follow either of the two routes still being considered – Bulgaria-Serbia-Hungary-Austria, or Bulgaria-Serbia-Croatia, Slovenia-Austria.

South Stream is a strategic project for Europe’s energy security and should be implemented by the end of 2015. Work is currently underway to draft a feasibility study for the marine section across the Black Sea and the surface section running through the transit countries.

The inter-governmental agreement signed in Vienna on April 25, 2010 between Russia and Austria on cooperation under the South Stream project removes all legal obstacles to its implementation.

The agreement was the last document that was necessary for the start of the project. Russia has signed similar documents with Serbia, Hungary, Greece, Slovenia, and Croatia.

The overall capacity of the marine section of the pipeline will be 63 billion cubic meters a year. Its cost is about 8.6 billion euros. The section is scheduled to be commissioned before December 31, 2015.

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