Putin advances South Stream pipeline building to 2012
MOSCOW, 31 Dec, AFP
Prime Minister Vladimir Putin brought forward to 2012 the date for
starting construction of the South Stream pipeline that aims to deliver
Russian gas to Western Europe while avoiding Ukraine. Putin’s
announcement marks an acceleration of the timetable for building the
hugely ambitious pipeline and comes after Moscow won agreement from
Ankara this week to lay the pipeline under Turkish waters. “I think it
would be desirable to start (construction) at the end of next year,”
Putin told the chief executive of Russian gas giant Gazprom Alexei
Miller at a meeting at his Novo-Ogaryovo residence outside Moscow. “Very
good, Vladimir Vladimirovich,” Miller replied. “We will do it this way.”
Miller told Putin that the total cost of the pipeline was estimated
at 16.5 billion euros (over $21 billion) — 10 billion euros for building
the pipeline across the Black Sea and 6.5 billion for its construction
on land. He said Russia would be paying around 7.5 billion euros of the
pipleline’s construction given that state-controlled Gazprom has a 50
percent share in the project. Gazprom later confirmed that Miller had
ordered the start date for the construction of the pipeline to be
brought forward to 2012 from the original intended start date of 2013.
The first gas should be pumped from 2015.
South Stream is a key strategic project for Russia, which will allow
it to pump gas to the European Union via the Black Sea and the Balkans
without using Ukraine’s gas transit network. Kiev’s political relations
with Moscow have fluctuated wildly over the last years while analysts
say the Ukrainian gas transit network is in urgent need of modernisation.
Putin had announced this week after talks with Turkish Energy
Minister Taner Yildiz that Turkey had issued final approval to construct
the South Stream pipeline through its waters. “We took a very important
step with our Turkish friends,” Putin told Miller. The project was
originally conceived jointly by Gazprom and the Italian energy firm ENI.
In September, they were formally joined in the consortium by
Germany’s Wintershall and the French power producer EDF.
After exiting the Black Sea, the pipeline is due to cross Bulgaria,
Serbia, Hungary and Slovenia and then Austria to connect with the main
European pipeline network.
Miller said that agreements had now been signed with all the transit
states and work on the pipeline was already at the planning stage. “All
the work is being carried out strictly according to the timetable so
that there is no danger of failing to meet our deadline the pumping of
the first gas from the end of 2015,” he said. Russia has until now sent
most of its gas to Europe through Ukraine, a dependence that had
disastrous consequences for EU consumers in January 2009 when a row
between Moscow and Kiev resulted in a cut in supplies.
Miller told Putin that Ukraine had valued its gas transit network at
20 billion dollars, a sum he described as “quite large” given that the
cost of modernising its pipelines had been put at 2-8 billion euros
($2.5-10 billion). Putin said that for all its problems, Ukraine’s gas
transit network would remain “in demand”, especially as European gas
consumption was going to increase as some EU states scale back or
abandon their use of nuclear energy. “I hope that Ukraine is going to
remain our strategic partner,” Putin said. |