South Stream offshore project progressing well

The Supervisory Board of Directors of South Stream Transport B.V. met today at the Company’s headquarters in Amsterdam. During the meeting, the four Shareholders noted that the offshore Project is on track.

Dr. Henning Voscherau, Chairman of the Supervisory Board: “The progress of the Offshore Project is testimony to the good cooperation between our European and Russian Shareholders. Likewise, I believe South Stream can also serve to foster cooperation on a bigger scale, as the pipeline will create mutual benefits and provide secure energy supplies to Bulgaria and Europe as a whole.“

During the meeting, it was noted that all arrangements for the first two offshore pipelines are in place. In the first quarter of 2014, South Stream Transport placed orders for the supply of more than 150,000 pipes for the first two pipelines. In addition, Saipem and Allseas were contracted for construction and offshore pipe laying services. Since January 2014, the Company has also signed agreements with two Bulgarian ports for pipe storage, with Siemens for the supply of equipment for control of pipeline operations and with DNV-GL for the certification of the pipeline. This week, South Stream Transport also awarded a contract to the German firm RMG Messtechnik for the supply of metering equipment for the landfall facilities in Russia and Bulgaria. Therefore, all contracts are in place to start offshore construction of the first line this autumn.

The South Stream Offshore Pipeline through the Black Sea is the offshore component of the South Stream Pipeline System which will increase the security of supply of natural gas from Russia to Central and South-Eastern Europe as it creates a new supply route and provides additional transport capacity. The Project will contribute to European energy security in a safe, reliable and environmentally responsible way and will help EU member states meet their CO2 reduction targets.

The South Stream Offshore Pipeline will have a length of 931 km. It will connect the world’s largest natural gas reserves in Russia with consumers in the European Union. The South Stream Offshore Pipeline will originate on the Russian Black Sea shore in the area of Anapa, cross the Turkish Exclusive Economic Zone in the Black Sea and land on the Bulgarian coast near Varna. Commercial operations are scheduled to start by the end of 2015. When fully operational, the South Stream Offshore Pipeline will consist of four pipeline strings, reaching an annual capacity of 63 billion cubic metres.

South Stream Transport B.V. is an international joint venture established for the planning, construction and subsequent operation of the offshore gas pipeline through the Black Sea. The Russian company Gazprom holds a 50% stake in the joint venture. The Italian company Eni has a 20% stake. The French energy company EDF and the German company Wintershall each hold 15%.