Gazprom says South Stream to cost 15.5 bln euros

30th November 2010, Comments 0 comments

Gazprom said Tuesday that South Stream's construction would cost 15.5 billion euros (20.2 billion dollar), arguing that its natural gas pipeline represented the only reliable supply alternative for Europe.

"The price tag, at current prices, is around 10 billion euros for the sea section, and around 5.5 billion euros for Europe's land sector," the Russian natural gas giant said in a statement published on its website.

It further predicted that Europe's natural gas consumption would grow from the current 530 billion cubic meters per year to more than 600 billion cubic meters by 2020, while its ability to produce gas in the region would halve in the same time.

"These circumstances make South Steam into one of the few real alternatives for solving the energy shortage problem and ensuring Europe's energy security," the statement said.

The South Stream project, designed to compete with the EU's Nabucco pipeline that would reduce European dependency on Russian exports, would run 3,600 kilometers (2,250 miles) under the Black Sea and through the Balkans by 2015.

The company has given various estimates of the project's cost, providing figures of anywhere between 10 and 24 billion euros.

Gazprom has managed to get Austrian energy group OMV, EDF of France and Eni of Italy to join the project.

Nabucco would go through Turkey and the Balkan states from 2014-15 and avoid crossing Russia.

© 2010 AFP

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