Putin: Speed Up South Stream Execution (Russia)

Alexey Miller, Chairman of the Gazprom Management Committee reported recently to Vladimir Putin, Prime Minister of the Russian Federation on the negotiations with Ukraine in the gas sector and, in this regard, on the South Stream project implementation.

According to Alexey Miller, Ukrainian partners estimate that the Ukrainian gas transmission system will cost USD 20 billion. In addition, the GTS upgrade, according to various estimates, will require another EUR 2–3 to 7–8 billion. Moreover, the Ukrainian party insists on the Russian gas price discount, which will cost Gazprom some USD 9 billion a year.

While the South Stream project is estimated to cost EUR 16.5 billion, EUR 10 billion out of this amount will be spent on the offshore section and EUR 6.5 billion – the onshore section.

Vladimir Putin ordered to continue negotiations with Ukrainian partners, “on the assumption that Ukraine has always been, it is and, I hope, will remain a strategic partner of ours”, yet to speed up the South Stream project execution. And to start constructing it as early as in 2012, instead of 2013.

The South Stream project is aimed at strengthening the European energy security. It is another real step toward executing the Gazprom strategy to diversify the Russian natural gas supply routes. The new gas pipeline system meeting the latest environmental and engineering requirements will significantly raise the energy supply security of the entire European continent.

[mappress]

Offshore Energy Today Staff, January 3, 2012; Image: Gazprom