Gazprom prices South Stream at EUR 25 bn

Russian gas giant Gazprom estimates the South Stream gas pipeline project at up to EUR 25 bn, according to the company's presentation at a meeting with investors. The underwater section across the Black Sea is priced at EUR 4 bn, and overland stretches to Austria and Greece are estimated at between EUR 15 bn and EUR 20 bn.
These estimates differ from earlier assessments voiced by Paolo Scaroni, CEO of Italy's ENI -- a partner in the project -- who put total costs at $ 20 bn (EUR 15.9 bn), including $ 10 bn (EUR 7.95 bn) for the underwater section and another $ 10 bn for the overland section.

In June 2007, Gazprom and ENI signed a framework memorandum to build the South Stream pipeline to take Russian gas under the Black Sea and overland from Bulgaria to southern Europe. The 900 km (550-mile) pipeline will pass under the Black Sea into Bulgaria, then split into two arms, the northern section stretching to Romania, Hungary, the Czech Republic and Austria, and the southern arm running through Bulgaria to southern Italy.
The pipeline's design capacity is about 31 bn cm, but it could be raised to 47 bn cm.

On January 18, Gazprom and ENI set up South Stream AG, a joint venture based in Switzerland, to prepare marketing research and technical and economic feasibility studies for South Stream.
Completion of the final technical and economical feasibility study is scheduled for the second half of 2010, and the pipeline is expected to become operational at the end of 2014-beginning of 2015.

To implement the project, Russia has signed a number of intergovernmental agreements with countries where the overland pipeline sections will stretch.
Joint ventures are being created in each of these countries. Russia already signed intergovernmental agreements with Bulgaria on January 18, 2008; with Serbia on January 25, 2008; with Hungary on February 28, and with Greece on April 29, 2008. Similar agreements will also be signed with Slovenia and Austria soon.