South Stream Doubts Emerge
The future of the South Stream gas pipeline will be dependent on the outcome of negotiations with Ukraine.
In an article titled "The Unnecessary Pipe," the Russian daily Vendamosti writes that the USD 30 billion pipeline project would be axed if Russia and Ukraine were to come to an agreement for the joint use of Ukraine's gas network, which handles 80% of Russian gas transit to EU nations.
Alexei Miller, CEO of Russian gas giant Gazprom, stated that "South Stream was always tied to Ukraine."
A further round of continuing talks between the two nations is scheduled for January 15th. Should an agreement be reached, Moscow will have 3 options – reduce the capacity of South Stream, delay the construction, or scrap the project altogether, a source close to Gazprom is quoted saying. Similar options are reported by Vedomosti, citing a member of the Russian cabinet.
"Vedomosti" further writes that a Gazprom representative, who only two weeks ago insisted that South Stream will be built on time and on schedule, had declined to comment on Miller's statements.
The South Stream pipeline, designed to diverse Russian gas routes away from transit countries such as Ukraine, plans to transport up to 63 billion cubic meters of gas from Russia under the Black Sea, to Bulgaria, Austria, Italy and Greece with construction due to be completed by 2015.
In addition to Gazprom, South Stream consortium shareholders are ENI (20 per cent) Wintershall Holding (15 per cent) and EDF (15 per cent).