ENI in the South Stream Penalty Box?
Last week Gazprom boss Alexei Miller said that he had no doubts over the financing of the South Stream gas pipeline project or that it will be finished on time in 2015.
South Stream has not lined up financing for its undertaking and there are reports of disagreements within the main partnership.
Lead partner Russian gas monopoly Gazprom is purportedly little support for the project from its Italian partner, Eni SpA.
Eni, "have been blocking every proposal from Moscow," according to an unnamed source familiar with the talks between two companies, quoted by Russian business daily Kommersant on October 14.
During a recent meeting in St. Petersburg, Russian Prime Minister Vladimir Putin reportedly asked his Italian counterpart Silvio Berlusconi, whether he would approve of a German company entering the project.
Putin’s question was not rhetorical: Gazprom intends to keep its 50% stake and the Italian stake would be cut further to make room for a German partner.
Gazprom was reportedly pushing to add more shareholders, (reportedly Germany's Wintershall), who would join South Stream by taking over parts of Eni's stake, but the Italian company "insisted" on maintaining the shareholder parity, the daily said.
Putin was likely publicly setting the stage for changes to the partnership.
Italy has been urging the European Union to declare South Stream a Trans-European Network (TEN) project; a status that would facilitate access to credits for South Stream. French based EDF's entry into South Stream was partly intended to assist in the push for TEN status for the project.
Marcel Kramer, Chairman of the Executive Board and Chief Executive Officer of Gasunie is leading execution of the South Stream project.
Sorting out the partnership may end up being Mr. Kramer's initial priority.