Gazprom subsidiary awarded South Stream deal

Subsidiary Centrgaz will build pipeline through Serbia.
By Daniel J. Graeber  |  July 9, 2014 at 8:46 AM
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BELGRADE, Serbia, July 9 (UPI) -- Russian natural gas company Gazprom announced a Serbian subsidiary will be tasked with building the South Stream natural gas pipeline in the country.

"Centrgaz will focus on design, procurement, construction and installation activities, personnel training and commissioning of South Stream in Serbia," Gazprom said in a statement. "The contract stipulates involving Serbian subcontractors in carrying out certain operations."

Centrgaz is a subsidiary of Gazprom. The Russian parent company said the bid was secured during a March bidding process that involved four other companies.

South Stream is designed to add a layer of diversity to Gazprom's export strategy for European consumers. Most of the Russian gas bound for Europe runs through a Ukrainian transit system and geopolitical issues there expose that route to risk.

European leaders have balked over South Stream, saying it would strengthen Russia's grip on the energy sector. European energy regulations are meant to keep monopolies like Gazprom from having a major stake in transit networks.

Gazprom said Tuesday it expects first gas deliveries through South Stream by late 2015 and the entire route from the Black Sea through Central Europe should be in service by 2018.

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