South stream gas pipeline

Construction has commenced on the offshore section of the proposed South Stream gas pipeline, which will run across the Black Sea to southern and central Europe, transporting Russian natural gas.

President of the Russian Federation Vladimir Putin, plus officials of the participating nations and consortium partners, attended a launch ceremony last week held at the Russkaya compressor station in Anapa, Krasnodar Territory, to oversee the ceremonial first welding of the pipeline.

Natural gas extractor Gazprom will begin construction of the offshore section of the pipeline at a water depth of about two kilometres, from the Russkaya compressor station to the Bulgarian coast.

With a design capacity of 63 billion cubic metres, the gas pipeline is expected to stretch beyond 900km, according to the company.

Commenting on the start-up of construction during the ceremony, Gazprom Management Committee chairman Alexey Miller hoped that the historical infrastructure project would drive the development of the economies in the countries involved in the pipeline.

"With a design capacity of 63 billion cubic metres, the gas pipeline is expected to stretch beyond 900km, according to the company."

"The project embodies the intention of Russia and the countries of southern and central Europe to strengthen the partnership in the energy sector and to create a new reliable system of Russian gas supplies to European consumers," he said.

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By GlobalData

In January 2012, Miller approved the final action plan to begin the offshore section of construction by the end of the year, after being authorised to expedite the project by Vladimir Putin in December 2011.

With plans underway to supply first gas through the South Stream gas pipeline by late 2015, Gazprom is executing a large-scale gas transmission system (GTS) project called ‘Southern Corridor’ in eight areas of the Russian Federation.

Works pertaining to optimisation of gas pipeline routes, designing of gas linepipes and compressor stations are being taken up along with engineering studies required for the project.

The South Stream pipeline project was announced in June 2007 when Russia’s Gazprom and Italy’s Eni had signed a MoU and subsequently formed a joint venture, called South Stream AG, with equal ownership in January 2008.

Later in October 2011, Électricité de France (EDF) and BASF subsidiary Wintershall also joined the project, forming a new consortium – South Stream Transport AG – to execute the offshore section.

The consortium signed final investment decisions with several countries including Bulgaria, Slovenia, Hungary and Serbia for the project.

The South Stream project is also widely considered as a rival to Nabucco pipeline, a proposed natural gas pipeline from Erzurum in Turkey to Baumgarten an der March in Austria, to reduce European dependence on Russian energy.

Image: First gas will be supplied through the South Stream gas pipeline by late 2015. Photo courtesy of Gazprom.