ROSTOV-ON-DON, Russia (Combined Sources)–Russian President Dmitry Medvedev expressed confidence at the Russia-EU summit that South Stream gas pipeline could turn into a trans-European energy network.
“Of late we’ve already reached good results,” the president said adding that Moscow “consecutively diversified oil and gas supply routes.”
Around 80 percent of Russian natural gas bound for Europe travels through Soviet-era pipelines in Ukraine. Although bilateral ties have improved with the new government in Kiev, Moscow cut gas supplies to Ukraine most recently in 2009 because of contract disputes between Gazprom and Ukrainian energy company Naftogaz.
That relationship led in part to a push to diversify the gas transit networks to Europe. Russia is busy with construction of its Nord Stream pipeline through the Baltic Sea and planning the South Stream network through the Black Sea.
“We hope that the South Stream project can get the status of the trans-European energy network in the future,” he said adding that Russia and the EU were jointly developing insurance mechanisms that took into account the interests of all parties – suppliers, importers and transit-countries and that nobody should suffer.
The South Stream gas pipeline is a Gazprom and Italian ENI’s joint project which should carry Russian gas under the Black Sea through a 900-kilometer-long pipeline to Bulgaria and through Serbia to other European countries.
The investment’s value is estimated to EUR 20bn, the pipeline’s capacity should be 63bn cubic meters a year and the construction should begin in 2011, while the deadline for completion of works being set for the end of 2015.
Interstate agreements on construction of the South Stream were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria.
Serbia was the first one to establish a joint company with Gazprom in order to implement the South Stream project, in which the Russian company has a 51 percent stake.