ENI, Gazprom sign accord for EDF to enter South Stream

18th June 2010, Comments 0 comments

Italian energy company ENI and Russian giant Gazprom signed a memorandum of understanding on Friday for French group EDF to acquire a stake in the South Stream Pipeline project.

EDF "will acquire a stake in the Italian-Russian joint venture, which has been put in place to build the infrastructure across the Black Sea to bring gas to Europe," the companies said in a joint statement.

Russian Prime Minister Vladimir Putin announced in April that EDF would join the venture to run a pipeline under the Black Sea from Russia to Bulgaria, saying that the French group had asked for a 20 percent stake.

Friday's statement did not say how much EDF would invest in the project, however.

Scheduled for completion in 2015, the South Stream Pipeline will channel Russian gas from Novorossiisk on the Black Sea coast to western Europe, bypassing Ukraine, currently an essential link in the supply chain to Europe.

Gas remains a hugely sensitive issue between Moscow and Kiev after a bitter row in January 2009 led to Russia turning off the taps to Ukraine, which in turn left many European countries short of gas.

The cost of the 3,600-kilometre (2,200-mile) pipeline is estimated at between 19 billion euros and 24 billion euros (32 billion dollars).

It will deliver 63 billion cubic meters of gas per year, or 35 percent of Russia's exports to Europe, which obtains 42 percent of its needs from Russia.

© 2010 AFP

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