Gazprom, Eni plan to bypass Turkey
Gazprom and Italian oil firm Eni unveiled a plan on Saturday for a big new pipeline to take Russian gas under the Black Sea to Europe, undermining an earlier plan to extend a Turkish route.
The 900 km (560 mile) "South Stream" pipeline would come ashore in Bulgaria and then branch to Austria and Slovenia in one spur and southern Italy in another, Eni's CEO Paolo Scaroni told a news conference with Gazprom Deputy Chief Executive Alexander Medvedev.
At least some of the gas will come from fields previously operated by bankrupt oil firm YUKOS. Russian Energy Minister Viktor Khristenko told Vesti-24 television that the 30 billion cubic metre pipeline could also supply Greece and Bulgaria.
"The cost of the project and the distribution of stakes among the partners will be decided after the feasibility study, which is currently being done by Italy's Saipem," Gazprom spokesman Denis Ignatyev said.
Saipem was also the contractor for the "Blue Stream" pipeline from Russia to Turkey, also jointly owned by Gazprom and Eni. Gazprom has previously talked of expanding Blue Stream to southern Europe and Israel, but that would conflict with the new South Stream plan.
"We're going to continue to work with Turkey on plans to supply our gas across its territory and onwards to Israel," Gazprom's chief spokesman Sergei Kupriyanov said. He declined to say where that would leave the idea of expanding Blue Stream to south-eastern Europe.
South Stream is also likely to dash hopes of Gazprom joining the Nabucco pipeline project, a $6.2 billion plan, led by Austria, to carry Caspian and Middle Eastern gas to Europe via Turkey and the Balkans.
Nord and south:
State-controlled Gazprom has made a fetish of owning its export routes since a disruption to supplies during a pricing dispute with Ukraine at the start of 2006 which sparked outrage across Europe, which gets a quarter of its gas from Russia.
Since then Gazprom has launched a northern route known as "Nord Stream" under the Baltic Sea to Germany, in a consortium with E.ON and Wintershall, part of BASF.
Just as Nord Stream cuts out Ukraine, South Stream would bypass Turkey and isolate Gazprom's gas supplies to southern Europe from any political risk in that country.
Apart from Germany, Italy is Gazprom's second biggest customer outside the former Soviet Union, relying on Russia for around 22 billion cubic metres of gas a year.
South Stream will come online three years after getting the necessary approvals, with the project costs shared equally by the two companies, the firms said.
The companies signed an agreement last year that lets Gazprom sell gas directly on the Italian market, a key part of its strategy to control all revenue from its gas to avoid losing most of the value to end-user suppliers.
For Eni, South Stream is a chance to export gas from assets it bought at auction earlier this year, when Russia forced the break-up and sale of former oil major YUKOS. With Gazprom holding a monopoly on exports, that opportunity is a rare one.
"The South Stream project is the third pillar of the strategic agreement signed by Eni and Gazprom in 2006," Scaroni said. "This new gas supply agreement will let Eni make the best use of its recently acquired ArcticGas and Urengoil assets."
Eni bought the production firms at a YUKOS auction in April, together with a 20 percent stake in Gazprom's oil subsidiary Gazprom Neft, for $5.8 billion.
- First Steel Cut for New Swedish-Finnish RoPax
- Hapag-Lloyd to apply GRI from North East Asia
- EXMAR and Anglo-Eastern form new JV for LNG ship management
- Shell, Qatar Petroleum Form Global LNG Bunkering JV
- Maersk increases rates from Shanghai to Europe
- Smit Lamnalco Wins 10-Year FLNG Services Deal in Mozambique
- Teekay Offshore Orders Suezmax Shuttle Tanker from Samsung Heavy
- H-Line, Vitol Pen Ten-Year Charter Deal for LNG Carrier Newbuild
- PD Ports crowned Business of the Year at Annual Excellence Awards
- MSC: Third 23,000 TEU Boxship Named in Bremerhaven
- UK Selects McLaughlin & Harvey for 2nd Phase of Liverpool2
- Maersk Tankers Looking to Buy AET’s MR Tanker Fleet
- Georgia Ports to Double Container Capacity
- Maersk announces fresh FAK rates from Asia
- Shandong Shipping Orders 12 Tankers, Bulkers in China
Gazprom Eni plan to bypass
Gazprom, Eni plan to bypass Turkey
- Hamburg Süd launches digital booking application
- Pacific Basin to Pay USD 74 Mn for Bulker Quartet
- Samsung Heavy, ABS Team Up on Next-Generation LNG Carrier
- MOL Wraps Up LNG Bunkering Trial in Port of Kobe
- Hapag-Lloyd increases rates from East Asia
- Largest ‘green’ hydrogen plant in Europe
- Saudis To Buyers: You’ll Get Your Oil Volumes Despite Attack
- Essar Ports: Green Ports Are the Future of the Industry
- Tsuneishi to build hydrogen-powered ferry in cooperation with CMB
- US ascends to top of oil export leagues
- Suez Canal extends discounts for LNG carriers
- Construction Starts on Furetank’s 7th Vinga Tanker
- Maersk announces AE2 blank sailing
- MPC Capital, Zeaborn Form New Joint Venture to Manage Over 160 Boxships
- Oil prices up as Saudis struggle with rapid recovery
- MAN Energy to supply hybrid propulsion system for research ship
- North Sea Port starts testing
- Caribbean port selects Octopi
- IUMI: Marine Cargo Premiums Inadequate to Cover Losses
- Iran Seizes Another Tanker for Allegedly Smuggling Fuel