South Stream

South Stream ( _ru. Южный Поток, _bg. Южен поток, _sr. Jужни ток/Južni tok, _hu. Déli Áramlat) is a proposed gas pipeline to transport Russian natural gas to Italy. The project would partly replace the planned extension of Blue Stream from Turkey through Bulgaria and Serbia to Hungary and Austria. South Stream is also likely to dash hopes of Gazprom joining the Nabucco Pipeline project.

History

The South Stream pipeline project was announced on 23 June 2007, when CEO of Italian energy company Eni Paolo Scaroni and Vice-Chairman of Russian Gazprom Alexander Medvedev signed in Rome a memorandum of understanding of construction South Stream.cite news
url=http://www.energypublisher.com/article.asp?id=10031
title=Eni and Gazprom sign gas pipeline accord for EU
publisher=Energy Publisher
date=2007-06-23
accessdate=2007-06-26] On 22 November 2007, Gazprom and Eni signed in Moscow an agreement about establishing a joint project company for the commissioning of the marketing and technical feasibility studies of the project.cite news
url = http://www.scandoil.com/moxie-bm2/news/eni-and-gazprom-sign-the-agreement-for-the-south-s.shtml
title= Eni and Gazprom sign the agreement for the South Stream Project
publisher=Scandinavian Oil-Gas Magazine
date=2007-11-23
accessdate=2008-02-24] On 18 January 2008, Gazprom and Eni registered in Switzerland the joint venture South Stream AG equally owned by the two companies.cite news | publisher=Forbes | url = http://www.forbes.com/afxnewslimited/feeds/afx/2008/01/18/afx4548113.html | title= Eni, Gazprom set up company for South Stream gas pipeline | date=2008-01-18 | accessdate=2008-02-24]

The agreement between Russia and Bulgaria on the Bulgaria's participation in the project was signed on 18 January 2008. It was agreed to set up an equally owned company to build and operate the Bulgarian section of the pipeline.cite news
publisher=AGI News
url = http://www.agi.it/business/news/200801181526-ene-ren0051-art.html
title= Eni: Agreement Russia and Bulgaria on South Stream
date=2008-01-18
accessdate=2008-01-18] The agreement was ratified by Bulgarian Parliament on 25 July 2008.cite news
publisher=Downstream Today
url=http://www.downstreamtoday.com/News/Articles/200807/Bulgarian_Parliament_Ratifies_South_Stre_12070.aspx
title= Bulgarian Parliament Ratifies South Stream Deal
date=2008-07-25
accessdate=2008-07-26]

The first agreement between Russia and Serbia was signed even before announcement of the South Stream project. On 20 December 2006, Gazprom and Serbian state-owned gas company Srbijagas agreed to study building a gas pipeline running from Bulgaria through Serbia.cite news
publisher=Upstream Online
url=http://www.upstreamonline.com/live/article125148.ece
title= Serbia signs up for gas pipe study
date=2006-12-20
accessdate=2008-02-26] On 25 January 2008, Russia and Serbia signed an agreement to route a northern pipe of South Stream through Serbia and on 25 February 2008, an agreement to create a joint company to build the Serbian section of the pipeline and large gas storage facility near Banatski Dvor in Serbia, was signed.cite news
url=http://uk.reuters.com/article/worldNews/idUKL2515142420080125
title=Serbia signs strategic energy deal with Russia
publisher=Reuters
date=2008-01-25
accessdate=2008-01-25] cite news
url=http://www.downstreamtoday.com/News/Articles/200802/Russia_Serbia_Sign_Gas_Pipeline_Deal_8896.aspx
title=Russia, Serbia Sign Gas Pipeline Deal
publisher=Downstream Today
date=2008-02-25
accessdate=2008-02-25] At the same day, Russia and Hungary agreed to set up an equally owned joint company to build and operate the Hungarian section of the pipeline.cite news
publisher=RIA
url = http://en.rian.ru/russia/20080228/100273874.html
title= Hungary officially joins South Stream project
date=2008-02-18
accessdate=2008-02-28] On 29 April 2008, Russia and Greece signed an intergovernmental agreement on cooperation in the construction and operation of the Greek section of the South Stream.cite news
url=http://www.downstreamtoday.com/News/Articles/200804/Russia_Greece_Sign_South_Stream_Deal_10495.aspx
title=Russia, Greece Sign South Stream Deal
publisher=Downstream Today
date=2008-04-29
accessdate=2008-05-10]

Route

The convert|900|km|mi|-1 long offshore section of South Stream would start from the Beregovaya compressor station at the Russia’s Black Sea coast, and would run to Bulgaria's Varna. The pipeline route will cross the continental shelf of Ukraine and Romania. According to the UN Convention on the Law of the Sea, the delineation of the course for the laying of such pipelines on the continental shelf is subject to the consent of the coastal State.cite news
publisher=Forbes
url = http://www.forbes.com/afxnewslimited/feeds/afx/2008/02/29/afx4713602.html
title= Gazprom's, ENI's South Stream pipeline could be in trouble - report
date=2008-02-29
accessdate=2008-03-02] This section would be built and operated by South Stream AG, a joint company of Gazprom and Eni.cite news
publisher=CNBC
url = http://www.cnbc.com/id/22726999
title= Eni, Gazprom set up company for South Stream gas pipeline
date=2008-01-18
accessdate=2008-01-21]

From Varna, the south-western route would continue through Greece and the Ionian Sea to southern Italy.cite news
url = http://www.upstreamonline.com/live/article152432.ece
title = Greece steps up for South Stream
publisher = Upstream Online
date = 2008-04-15
accessdate = 2008-04-19] Greece has proposed that the southern pipe may also supply the Turkey-Greece-Italy pipeline.cite news
publisher=New Europe
url = http://www.neurope.eu/articles/83300.php
title= After Bourgas-Alexandroupolis Greece eyes South Stream
author=Kostis Geropoulos
date=2008-02-25
accessdate=2008-02-25] The north-western pipeline will run through Serbia, Hungary and Slovenia to Austria ending at the Baumgarten gas storage.cite news
publisher=RIA Novosti
url = http://en.rian.ru/russia/20080226/100031930.html
title= Hungary to join Russia's South Stream gas project
date=2008-02-26
accessdate=2008-02-26] cite news
url = http://www.upstreamonline.com/live/article152593.ece
title = OMV calls for South Stream through Austria
publisher = Upstream Online
date = 2008-04-17
accessdate = 2008-04-19] cite news
url = http://www.downstreamtoday.com/News/Articles/200806/Gazprom_South_Stream_To_Cross_Slovenia_11314.aspx
title = Gazprom: South Stream To Cross Slovenia
publisher = Downstream Today
date = 2008-06-11
accessdate = 2008-06-12] cite news
url = http://www.downstreamtoday.com/News/Articles/200804/Gazprom_Discussing_South_Stream_Role_for_10197.aspx
title = Gazprom Discussing South Stream Role for OMV
publisher = Downstream Today
date = 2008-04-17
accessdate = 2008-04-19] Another option is that the north-western route would run through Slovenia to northern Italy.cite news
url=http://www.eni.it/eni/internal.do?menu=true&RID=@2slKM%7C0?xoidcmWopk&catId=-1073763205&cntTypeId=1008&portalId=0&lang=en
title=Eni and Gazprom sign the agreement for the South Stream Project
publisher=Eni
date=2007-06-23
accessdate=2007-06-26] cite news | url = http://www.upstreamonline.com/live/article152282.ece
title = Slovenia eyes South Stream berth
publisher = Upstream Online
date = 2008-04-11
accessdate = 2008-04-19] It is possible that two smaller parts will go through Bosnia and Herzegovina to the Port of Ploče and another through Croatia to Port of Rijeka and pipeline end in Italy's Port of Trieste.cite news
publisher= Reuters
title = Minister slams Russian grab for Serb oil monopoly
url= http://uk.reuters.com/article/oilRpt/idUKL2852531920071228
date = 2007-12-28
accessdate=2007-12-31] cite news
publisher= Reuters
title = Serbs await Russian decision on South Stream route
url= http://uk.reuters.com/article/oilRpt/idUKL2084775020070720
date = 2007-07-20
accessdate=2007-12-31] cite news
publisher= Southeast European Times
title = Russia offers Serbia inclusion in South Stream gas pipeline
url= http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2007/12/12/feature-01
date = 2007-12-12
accessdate=2007-12-31] There are also talks that the South Stream pipeline will be connected to the Wingas-owned Haidach underground gas storage, the second largest gas storage in Central Europe.Fact|date=April 2008

Technical description

The offshore pipeline is planned to carry 31 billion cubic meters (bcm) of gas annually.cite news
url=http://www.reuters.com/article/businessNews/idUSL2328219820070623?feedType=RSS&sp=true
title=Gazprom, Eni plan big gas pipeline bypassing Turkey
publisher=Reuters
date=2007-06-23
accessdate=2007-06-26] UK's Melrose Resources said it would convert the Galata offshore field in Bulgaria to a gas storage facility with initial capacity of 1.7 bcm by 2009.cite news
url=http://uk.biz.yahoo.com/080625/214/i2ay9.html
title=Melrose leaps on Bulgarian gas storage news
publisher=Yahoo!
date=2008-06-25
accessdate=2008-07-25] Pipeline sections in Serbia and Hungary will have capacity at least 10 bcm per annum both. There would be constructed two gas storage facilities, of which one underground storage facility with capacity at least 1 bcm will be in Hungary and another one in Banatski Dvor, Serbia with capacity of 3.2 bcm.cite news
url = http://www.kommersant.com/p859205/South_Stream/
title = Ukraine Surfaced in South Stream Project
publisher = Kommersant
date = 2008-02-29
accessdate = 2008-03-02] cite news
url = http://www.jamestown.org/edm/article.php?article_id=2372701
title = Gazprom set to pounce on Serbia as Putin moves into the Balkans
author= Vladimir Socor
publisher = Eurasia Daily Monitor
date = 2008-01-09
accessdate = 2008-06-01] Hungarian oil and gas company MOL has offered its empty natural gas field at Pusztaföldvár as a 9 bcm storage facility. MOL is also ready to offer its unused gas pipelines in West Hungary for links between Serbia and Austria. If Austria does not become part of the South Stream but Slovenia does, MOL will offer to replace the Baumgartner switch point in Austria with a MOL facility in Városföld.cite news
url = http://www.hatc.hu/enter.php?aid=45691
title = MOL offers reserve for South Stream
publisher = Hungary Around the Clock
date = 2008-05-05
accessdate = 2008-05-18]

The feasibility study will be prepared by Saipem, a subsidiary of Eni, and it is expected to be completed by 2009.cite news
url = http://www.reuters.com/article/sphereNews/idUSL1871461920080118?sp=true&view=sphere
title = Bulgaria signs up for Russian natural gas project
publisher = Reuters
date=2008-01-18
accessdate=2008-01-19] cite news
url = http://www.upstreamonline.com/live/article160100.ece
title = South Stream price tag hits $20bn
publisher = Upstream Online
date=2008-07-30
accessdate=2008-07-30] The construction is planned to be completed in less than three years after approval from European Union competition and regulatory authorities. Construction of the Serbian stretch is scheduled to start by 2010. The deliveries through the South Stream pipeline are scheduled to start by 2013.cite news
url = http://uk.reuters.com/article/oilRpt/idUKL2530997220080225
title = Russia wins Hungary for South Stream gas project
author=Oleg Shchedrov, Dmitry Solovyov
publisher = Reuters
date = 2008-02-25
accessdate = 2008-02-25] cite news
url=http://uk.reuters.com/article/topNews/idUKL2534673120080225
title = Russia and Serbia firm up gas pipeline deal
author=Oleg Shchedrov, Ellie Tzortzi
publisher = Reuters
date = 2008-02-25
accessdate = 2008-02-25] The pipeline is expected to cost at least US$20 billion.cite news
url = http://www.downstreamtoday.com/News/Articles/200807/Russian_Govt_B_Price_Tag_for_South_S_12148.aspx
title = Russian Govt: $20B Price Tag for South Stream
publisher = Downstream Today
date = 2008-07-30
accessdate = 2008-07-30] cite news
url = http://uk.reuters.com/article/UK_SMALLCAPSRPT/idUKL2212241120080222
title = U.S. throws weight behind EU's Nabucco pipeline
publisher = Reuters
date = 2008-02-22
accessdate = 2008-02-23] The Hungarian section will cost US$2 billion.

Project companies

The pipeline would be built and operated by several project companies. The main project company is South Stream AG, which is equally owned by Gazprom and Eni. South Stream AG was incorporated on 18 January 2008 in Zug in Switzerland with the share capital of 100,000 CHF.cite news
url = http://www.moneyhouse.ch/u/south_stream_ag_CH-170.3.031.763-0.htm
title = South Stream AG, Zug
publisher = itonex ag
accessdate = 2008-02-27
language=German] Also Gaz de France has expressed the intention to join South Stream, which has welcomed by Gazprom.cite news
url = http://www.kommersant.com/p850544/Gaz_de_France_South_Stream/
title = Gaz de France Prefers South Stream to Nabucco
publisher = Kommersant
date = 2008-02-08
accessdate = 2008-02-27]

The Bulgarian section of the pipeline would be built and operated by the joint venture of Gazprom and Bulgargaz, while the Serbian section by the joint venture of Gazprom and Srbijagas.cite news
publisher= Financial Times
title = Medvedev shows support for Serbia
url= http://www.ft.com/cms/s/0/de8f95e0-e3ae-11dc-8799-0000779fd2ac.html
author=Neil MacDonald
date = 2008-02-25
accessdate=2008-02-26] The Hungarian section would be built and operated by the equally owned joint venture between Gazprom and the state-owned Hungarian Development Bank MFB, which will buy the elaborated feasibility study of Hungarian section from SEP Co., a joint venture of Gazprom and MOL..cite news
publisher=Upstream Online
http://www.upstreamonline.com/live/article149592.ece
title= Budapest does South Stream sums
date=2008-02-28
accessdate=2008-03-01]

Controversy

Nabucco pipeline project

The South Stream project is seen as a rival to the planned Nabucco pipeline.cite news
publisher= BBC
title = Balkan boost for Russian gas plan
url= http://news.bbc.co.uk/2/hi/europe/7195522.stm
author=Neil MacDonald
date = 2008-02-25
accessdate=2008-02-26] There are doubts about the feasibility of South Stream project, since it may cost twice as much as Nabucco. Some experts claim that the South Stream pipeline is a political project to counter Nabucco and to expand Russian presence in the region.cite news
publisher= Southeast European Times
title = Energy security: South Stream vs. Nabucco gas pipelines
url= http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2008/02/14/feature-02
date = 2008-02-14
accessdate=2008-02-27]

Russian First Deputy Prime Minister Dmitry Medvedev and Hungarian Prime Minister Ferenc Gyurcsány have confirmed that there is no contradiction between South Stream and the Nabucco pipeline project, designated to bring Caspian (Azerbaijani) gas to South and Central Europe via Turkey. "South Stream will have no negative impact on Nabucco, just as Nabucco will have no negative effect on South Stream," Dmitry Medvedev said during his visit to Hungary on 25 February 2008.

Conflict with Ukraine

South Stream has been seen as diverting some gas exported through Ukraine, instead of providing a new source of gas for Europe. At the same time most of off-shore route of South Stream to be laid through the continental shelf of Ukraine. Although Ukraine has limited opportunities to ban the project, the laying pipeline on the continental shelf of Ukraine would require a large-scale environmental impact assessment study and environmental permits from Ukrainian authorities. There is speculations that Ukraine will permit the construction of South Stream in exchange of Russian permit to build the White Stream offshore gas pipeline from Georgia to Ukraine.

Offer to Romano Prodi

Before stepping down from the premiership, Italian Prime Minister Romano Prodi got an offer from Gazprom to become chairman of South Stream AG. This move was compared with the appointment of the former Chancellor of Germany Gerhard Schröder to lead Nord Stream AG, a consortium constructing Nord Stream pipeline. Romano Prodi has declined this offer.cite news
publisher= International Herald Tribune
author=Judy Dempsey
title = Gazprom courts Prodi as pipeline chief
url= http://www.iht.com/articles/2008/04/28/business/gazprom.php
date = 2008-04-28
accessdate=2008-05-10] According to the Prodi's spokeman "Prodi was extremely flattered, but reiterated that he wants to take some time off to ponder after leaving Italian politics."cite news
publisher= Downstream Today
author= Luca Di Leo; Liam Moloney
title = Outgoing Italian Premier Turns Down Top Job for South Stream
url= http://www.downstreamtoday.com/News/Articles/200804/Outgoing_Italian_Premier_Turns_Down_Top__10465.aspx
date = 2008-04-28
accessdate=2008-05-10]

ee also

* Blue Stream
* Nord Stream
* Trans-Adriatic Pipeline
* Turkey-Greece pipeline
* Greece-Italy pipeline

References

External links

* [http://www.southstream.ch/ South Stream AG]