Financial Times: Gazprom ready for South Stream

Gazprom has been putting the final investment agreements in place for the South Stream project, clearing the way for construction of the 63bn cubic metres a year pipeline to Europe to begin next month. Never mind that demand for Russian gas in Europe is falling, or the $19bn cost of South Stream. The pipeline will help free Gazprom from dependence on Ukrainian transit pipelines and improve European energy security.

Gazprom and its foreign partners took a final investment decision on the 900km offshore section of South Stream at a meeting in Milan late on Wednesday. The pipeline will be laid on the bed of the Black Sea and will link southern Russia with the coast of Bulgaria.  

On Thursday, Gazprom signed an agreement with the Bulgarian state energy company for construction of the onshore section crossing the Balkan country, which will mark the first leg of the pipeline’s trajectory across southern and central Europe. First gas deliveries will begin in 2015 and eventually build to 63bn cubic metres a year.  MORE