ABC.AZ: South Stream is driven into spot hub

Russian gas monopoly Gazprom is clearly losing the battle for its new South Stream pipeline project and preservation of fixed export prices.

The general manager of Eni (Gazprom’s main partner on South Stream), Paolo Scaroni, has announced that Gazprom and Eni have agreed first to build the northern overland branch of South Stream (Bulgaria, Serbia, Hungary, Slovenia, Austria), and only then southern one through the Adriatic Sea to Greece and the south of Italy.

"This issue is in sphere of Gazprom and transit countries. We agreed that the project on the branch to the south of Italy will be implemented after the completion of the first terrestrial branch to Austria," Mr. Scaroni said.

Intergovernmental agreements on South Stream have already been signed with Bulgaria, Serbia, Hungary, Slovenia and Austria - countries of the northern branch of the new pipeline, but there is not such an agreement with Italy. At the same time there is no clear guarantee that the investment decision on South Stream will be taken in late 2012 - Bulgaria is ready to decide itself on the matter only in November. At that, prospects of obtaining permission from the European Commission are unclear as well.  MORE