Gazprom Breaks Ground For South Stream

January 2013, Vol. 240 No. 1

Gazprom broke ground Dec. 14 on construction of South Stream gas pipeline in Russia. The final go-ahead was reached in November when Bulgaria, agreed to construction of the pipeline on its soil. Turkey last year granted Gazprom permission to run the pipeline under the Black Sea in its territorial waters.

The pipeline will go from the Russian city of Anapa along the seabed of the Black Sea to the Bulgarian coast, and from there on to Serbia, Hungary, Slovenia and Italy. A planned second branch of the pipeline would serve Croatia and Bosnia-Herzegovina. Gazprom holds a 50% stake in the project. Other participants include the Italian ENI (20% stake), the French EDF (15%) and the German Wintershall (15%).

The 1,500-km pipeline is estimated to cost about $16 billion and should be completed in 2015. When it reaches full capacity in 2018, it will be able to carry 63 Bcm of gas annually. The required environmental impact studies have yet to be performed and the technical specification is still incomplete. Gazprom sees South Stream pipeline as providing an alternative transmission route to European markets that bypasses Ukraine.