The main route of South Stream not to go to Austria but to the North of Italy

Gazprom OAO has determined the route of the South Stream – the main route of the gas pipeline will go not to Austria, that actively promotes Nabucco, but to the North of Italy, Moscow News writes on Wednesday referring to a source close to the Russian gas holding.
According to the interlocutor, the Russian concern has determined the route of the gas pipeline on the territory of Europe in September- after the signing in Sochi of the shareholders agreement on the construction of the sea part of South Stream.
The pipeline from the Black Sea will go via Bulgaria, Serbia, Hungary and Slovenia to the North of Italy. The gas pipelines-branches to Greece, Croatia, and Serbia are planned.
So Gazprom has turned away from the variant of transportation of large gas volume to the hub in Baumgarten (Austria) as well as the idea of construction of the pipeline via Greece and the Adriatic Sea to the South of Italy.
Gazprom has also excluded the possibility of replacing Bulgaria, that has slowed down the works by the South Stream for a few years, by Romania. The Government of Bulgaria has given the pipeline the status of the object of national importance.
A representative of Gazprom refused to comment the decision. Sources in the company say that Austria might participate in the South Stream project but only as a gas purchaser for its needs. The distribution hub will be located in Italy – from that point the Russian gas from the new pipeline will go to the European consumers.
Gazprom has been trying to locate the main point of gas delivery in Baumgarten (Austria) that is more developed as the distribution hub and is in the center of Europe. There is a large underground gas storage and Central European Gas Hub.
Moreover, the main volumes of the Caspian gas are to be delivered there by passing Russia by the Southern Gas Corridor by the gas transport project Nabucco. So there was a possibility to be ahead the direct competitor for sales market.
In 2010 Austria was the last country meant for the transit by the South Stream to sign the intergovernmental agreement with Russia in exchange for a number of concessions in other spheres.
Gazprom and OMV (Austria) found a JV on the parity basis to project and construct the Austrian site of the pipe, where a 40 km long pipe needed to be laid from the border with Hungary. The agreement with Gazprom was signed in conformity with which it purchases 50% of the controlled by OMV gas hub CEGH.
However, in the summer the deputy chairman of Gazprom, A. Medvedev, said that the European Committee set the unacceptable conditions and thus in fact blocked the deal. Brussels is evidently worried about Nabucco, for which it is still impossible to find gas sources.
As a result they didn’t provide access to the Austrian trade site to Gazprom, what finally played the main role in determining the route of the South Stream.
The press service of OMV couldn’t comment. It seems that Vienna hasn’t received any official notification from Gazprom, RIA Nosotri reports.
The South Stream project presupposes the construction of the gas pipeline via the water area of the Black Sea from Russia to the countries of the South and central Europe. The gas pipeline is planned to consist of 4 branches of 15.57 bln cubic meters each, the first is to be put into operation in December 2015, the full capacity is to be reached by 2018 (63 bln cubic meters). The start of the construction is planned for 2013. The approximate cost of the South Stream gas pipeline construction is €15.5 bln, 10 bln of which are meant for the sea site, 5.5 bln – for land.
The South Stream project is realized aiming at the diversification of the natural gas supply route to the European consumers. For the realization of the land site of the project with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria the intergovernmental agreements were signed.
Gazprom, Eni, Wintershall Holding GmbH and EDF on September 16th signed the shareholder agreement of the sea site of the South Stream project. In conformity with the document the stakes in the sea site of the South Stream project are the following: Gazprom – 50%, Eni – 20%, Wintershall Holding and EDF – 15% each.
Translated by Galiya Musabekova

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