Greek-Russian firm formed to build South Stream pipeline link

30th June 2010, Comments 0 comments

Greece's state gas distributor and Russian energy giant Gazprom on Wednesday formed a joint-stock company to plan and build a section of the South Stream pipeline to southern Europe, the government said.

The Greek gas transmission system operator (Desfa) and Gazprom each hold a 50-percent stake in the new company, South Stream Greece SA, the Greek environment and energy ministry said in a statement.

"The company will study, build and exploit the Greek section of South Stream," the ministry said.

It added that plans on the pipeline should be completed by the end of next year and the project is expected to be operational by 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.

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.

Russia has so far signed state accords with Bulgaria, Hungary, Austria, Serbia, Slovenia and Croatia on the pipeline, the ministry said.

Earlier in June, Italian energy company ENI and Gazprom also signed a memorandum of understanding for French group EDF to acquire a stake.

© 2010 AFP

0 Comments To This Article