South Stream serves interests of Russia, Italy and EU — minister.

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MOSCOW, July 11 (Itar-Tass) —— South Stream will serve the interests of Russia, Italy and the whole European Union as it will diversify gas supply routes, Russian Energy Minister Sergei Shmatko said.

“Energy cooperation is one of the priorities in Russian-Italian trade and economic relations. Moreover, our cooperation in this field is of a strategic nature,” Shmatko said at a meeting with Italian Minister for Economic Development Paolo Romani on Monday, July 11.

The ministers discussed the drafting of an inter-governmental agreement between Russia, Turkey and Italy on the construction of the Samsun-Ceyhan oil pipeline.

Further work on the draft will focus on coordinating and signing inter-corporate documents between companies.

Shmatko called for enhanced cooperation in the power industry, including in the construction of thermal power plants working on natural gas. “This question has become particularly relevant now that some European countries are phasing out their atomic energy programmes,” the Energy Ministry’s press service said.

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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