South Stream to present investment plan to banks next year

Participants of the South Stream pipeline project, intended to carry Russian gas along the bed of the Black Sea to Europe, will present its investment plan to banks in the second quarter of 2012, Paolo Scaroni, chief executive officer of Eni, one of South Stream shareholders, said on Friday.

A shareholder agreement was also signed on Friday and Russia’s Gazprom gas export monopoly received 50 percent in the project, while Electricite de France and Germany’s Wintershall will each get 15 percent and Eni will obtain 20 percent.

Scaroni also confirmed that the underwater section of the pipeline cost $10 billion.

Russia plans to launch the South Stream pipeline in 2015. The pipeline will transport up to 63 billion cubic meters of gas under the Black Sea to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine, which currently is at odds with Russia over the price of gas.

The neighboring ex-Soviet country accounts for 80 percent of Russian gas transit to EU nations but frequent rows with Moscow over gas prices sometimes end with Kiev switching the gas tap off in the middle of the winter.

Earlier on Friday, Ukrainian President Viktor Yanukovych suggested building the South Stream through Ukrainian territory, but Gazprom deputy head Valery Golubev said is was not reasonable from an economic point of view.

The EU, which is trying to diversify its energy sources and lessen its dependence on Russia, also sponsors the rival Nabucco, a project backed by the European Commission which would carry gas through Turkey, Bulgaria, Romania and Hungary into Austria and western Europe.


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