RBTH: Experts raise eyebrows at South Stream's final cost

President Vladimir Putin is expected to attend the ceremony marking the commencement of South Stream construction on Dec. 7. The head of state will be on hand because this is no ordinary construction effort. South Stream is one of the Kremlin’s most important and political energy projects of the decade.

The need for South Stream was first proclaimed in 2005. Like the recently launched Nord Stream, the project has become a response to multiple “gas wars” with Ukraine, which holds a monopoly on the transit of Russian natural gas to Europe. Russia exports 150 billion cubic meters (bcm) of gas annually, 100 bcm (3.5 trillion cubic feet) of which pass through Ukrainian territory.

Russia’s Gazprom and Italy’s Eni signed a memorandum on the construction of the new pipeline in 2007. Other countries have since jumped on board; existing shareholders of the Netherlands-incorporated South Stream Transport AG include Gazprom (50 percent), Eni (20 percent), France’s EDF and Germany’s Wintershall (15 percent each).   MORE