Gazrpom, Srbijagas Strike Action Plan on South Stream in Serbia

The preparation for South Stream's construction is expected to be over by the end of 2012. Map by south-stream.info

Russian energy giant Gazprom and Serbia's energy company Srbijagas have signed an action plan for the implementation of the Serbian section of the South Stream gas transit pipeline.

Alexei Miller, Gazprom CEO, and his Srbijagas counterpart Dusan Bajatovic signed the detailed action plan at a meeting in Zurich, Switzerland, on Friday, Gazprom announced in a statement.

For the execution of its project South Stream, a competitor to EU-sponsored pipeline Nabucco, Russia has signed bilateral cooperation agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia, and Austria. Bulgaria's neighbors Romania and Macedonia are also to be included.

The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria's Varna; the underwater section will be 900 km long.

In Bulgaria, the pipe is supposed to split in two - one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.

The project was initiated by Gazprom and the Italian company Eni, with French company EDF and German BASF to join as shareholders.

Gazprom and Italian company Eni, which currently have 50% stakes each, are making progress on the inclusion of France's EDF in South Stream.

EDF is expected to get a share of 10%, while the subsidiary of Germany's BASF, Wintershall, will have a share of 15%; both of those will be subtracted from Eni's share, which will be reduced to 25%. The inclusion of EDF and Wintershall is supposed to be completed by the end of 2011.

Bulgaria's Bulgargaz, a subsidiary of the Bulgarian Energy Holding, and Gazrpom signed a road map for the construction of the Russian sponsored South Stream pipeline in Varna in July 2010, and during Putin's visit in Sofia in November 2010, they signed a shareholders' agreement for the project company, which is to construct the Bulgarian section of South Stream. Both parties will have 50% of the shares in the joint venture.

The preliminary survey for the Bulgarian section of South Stream is expected to be completed by the end of March 2011, and after that Bulgaria will make a final decision on an EUR 500 M investment in its section of the South Stream project.

At present, the South Stream Consolidated Feasibility Study is being elaborated including the studies for the offshore section and for the respective gas pipelines in host countries of Southern and Central Europe.

On May 15, 2009 Gazprom and Srbijagas signed the Basic Agreement of Cooperation for the South Stream project in Serbia. The document set the specific principles of interaction between the parties at the pre-investment stage of the project and determined the conditions and the procedure of incorporation as well as the operation mechanisms for the joint project company.

During their meeting in Zurich Friday, Alexey Miller and Dusan Bajatovic also discussed the Banatski Dvor UGS facility project stressing that Gazprom and Srbijagas had reached a considerable progress in its execution: the bulk of permits required to initiate commercial operation of the underground gas storage facility by the Russian-Serbian joint venture had already been received.

In 2010 Gazprom export supplied Serbia with 1.76 billion cubic meters of natural gas.

Founded on October 1, 2005 by the Serbian Government within the reorganization of the state-owned Naftna Industrija Srbije – Serbian Oil Industry (NIS), Srbijagas is the Serbian state-owned company dealing with natural gas transmission, distribution and storage in Serbia.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!