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Serbia: South Stream a top priority

July 23, 2012 at 6:30 AM   |   Comments

BELGRADE, Serbia, July 23 (UPI) -- Serbia has placed the planned Russian-led South Stream gas pipeline among its highest national priorities, President Tomislav Nikolic says.

Nikolic said after meeting with the chief executive of the venture that will operate the Serbian sector of the pipeline the effort is one of the country's top concerns, the Tanjug news agency reported.

Nikolic met last week with Dmitry Malyshev, who has been appointed executive director of South Stream d.o.o. Novi Sad -- a subsidiary of the South Stream Serbia AG joint project company -- and came away declaring the pipeline will boost economic development in the country.

South Stream "is a project of enormous importance for the Republic of Serbia," Nikolic said, claiming it will bring $2.3 billion in direct investments into the country.

Preparations for the 255-mile arm of the Russia-to-Europe pipeline set to pass through Serbia are to be completed in October, with actual construction to start in December, the president's statement said.

Russian gas monopoly Gazprom has a 51 percent stake in South Stream Serbia AG, while Serbia's state-owned Srbijagas natural gas company holding a 49 percent stake.

At the meeting, which was also attended by acting Serbian Progressive Party President Aleksandar Vucic, Nikolic and Malyshev discussed the pipeline preparations, with "special attention" paid to how its Russian and Serbian backers would work together in building the "central point" in the transmission process to be housed in the country, Gazprom said.

A December start-up for South Stream would be in line with goals stated last year by Russian President Vladimir Putin, then the country's prime minister. Under that scenario, commercial deliveries would begin in 2015.

Partners in the pipeline's offshore section include Gazprom (50 percent) Italy's Eni (20 percent), along with Germany's Wintershall Holding and France's EDF at 15 percent each. Its capacity would be up to 63 billion cubic meters per year.

The pipeline would run under Turkish territorial waters of the Black Sea and include onshore sections in Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria, all of which have set up national joint ventures.

Geopolitical issues between Ukraine and Russia prompted Gazprom to look for new routes to deliver gas to European costumers.

South Stream would divide into two routes -- one to Greece and the other through the Balkans -- after it passes through the Turkish waters of the Black Sea.

Gazprom Chief Executive Officer Alexei Miller said last month the pipeline will be built in three stages in a "1+2+1" scheme, Platt's business news service reported.

He told the company's annual meeting in Moscow South Stream's first leg would become operational in Bulgaria in December 2015, with two more lines to be added by the end of 2016 and the fourth line the following year.

"We are planning to build [the first] two lines, each with a capacity of 15.5 billion cubic meters, they will be built in parallel," Miller told shareholders.

A final investment decision on the project is expected in November.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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