Greece agrees to join South Stream pipeline

Greece agrees to join South Stream pipeline

By Kerin Hope in Athens, Isabel Gorst in Moscow and agencies

Published: April 29 2008 12:45 | Last updated: April 29 2008 12:45

Greece formally agreed on Tuesday to host a section of Gazprom’s planned South Stream natural gas export pipeline, furthering its goal to become a regional transport hub for oil and gas supplies to Europe.

Gazprom, Russia’s state-run gas company, is building the pipeline in a partnership with Eni, the Italian oil company, to carry up to 30bn cubic metres a year of Russian gas across the Black Sea to Bulgaria.

From there it will split into two routes – one going north toward Slovenia and Italy, and another going south to Greece and across the Adriatic to Italy.

“The signing of the agreement to construct the Greek part of the South Stream pipeline has become the most important result [of talks],” Vladimir Putin, Russian president, said after a meeting with Kostas Karamanlis, the Greek prime minister.

Analysts say the South Stream project will pose a big challenge to the US and EU-backed Nabucco pipeline scheme. Under Nabucco, gas would come from ex-Soviet Azerbaijan to south Europe via Turkey, in an EU effort to diversify energy sources away from Russia. However, experts say the pipeline’s fruition is becoming increasingly difficult as Azeri reserves are questioned.

The Greek South Stream spur would carry up to 10bn cubic metres of gas a year under a 30-year transit arrangement, a Greek official said.

Athens opted to join the South Stream project after rejecting Russia’s request for a stake in a cross-border Turkish-Greek pipeline that began transporting Caspian gas into Europe last year.

The €300m ($465m, £235m) joint venture between Botas and Depa, the Turkish and Greek state-controlled gas companies, was intended to reduce Greek reliance on Russia as a supplier. The pipeline is being extended to Italy under an agreement between Depa and Edison, the Italian energy group. It is projected to carry up to 11bn cubic metres of Azeri gas.

Greece is also a partner alongside Russia and Bulgaria in a €1bn pipeline project to carry crude oil from the Black Sea to the north Aegean, bypassing the congested Bosphorus strait.

A Greek official yesterday dismissed a suggestion that Mr Karamanlis might head the South Stream project after Romani Prodi, Italy’s outgoing prime minister, turned down the job.

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Russia, Greece ink deal to build South Stream gas pipe stretch

MOSCOW, April 29 (Prime-Tass) -- The Russian and Greek governments signed Tuesday an agreement to build a stretch of the South Stream gas pipeline in Greece, ITAR-TASS reported.

The accord was signed during a meeting between Russian President Vladimir Putin and Greek Prime Minister Kostas Karamanlis.

Under the agreement, Russian natural gas giant Gazprom is expected to supply 10 billion cubic meters per year to Greece via the pipeline, Russian Industry and Energy Minister Viktor Khristenko said.

The South Stream pipeline is expected to be built by Russian natural gas giant Gazprom and Italian energy company Eni. The pipeline will run from Russia under the Black Sea to Bulgaria and then branch into two stretches. The first stretch is expected to run to the southwest via Bulgaria and Greece to Italy. The second stretch is expected to run to the northwest via Bulgaria to Central Europe. The pipeline's annual capacity is projected at 30 billion cubic meters. Gas supplies through the South Stream are expected to start in 2013.