The South Stream gas pipeline project is aimed to increase the export of natural gas to Europe and to ensure a reliable supply.
The offshore section of the pipeline, about 900 km, will run under the Black Sea from Russia to Bulgaria. The onshore section provides an opportunity for countries in Central and Southern Europe.
The design capacity is 63 billion cubic meters per year. Commissioning is scheduled for the end of 2015, the official start of pipeline construction is on December 7, 2012
On June 23, 2007 Eni and Gazprom signed a memorandum of understanding on the construction of the South Stream undersea section. The memorandum includes implementation of a feasibility study, and defines the principles for the planning, financing, construction, technical and commercial management of the pipeline. On January 18, 2008 Eni and Gazprom announced the registration of South Stream AG, in which both companies hold a 50% stake.
On January 18, 2008 a special purpose company for the construction of the offshore pipeline, South Stream AG was registered in Switzerland. The founders of the company were Gazprom and Eni on a parity basis.
During the period from 2008 to 2010, intergovernmental agreements with Austria, Bulgaria, Hungary, Greece, Serbia, Slovenia and Croatia were signed.
Bilateral agreements on cooperation in the project were concluded with the relevant national companies in Serbia, Austria, Bulgaria, Hungary, Greece and Slovenia.
Joint project companies for the project in Serbia, South Stream Serbia AG (Gazprom - 51%, Srbijagas - 49%), in Hungary - South Stream Hungary Zrt (Gazprom and the Hungarian Development bank 50% each), in Greece - South Stream Greece SA (Gazprom and DESFA 50% each), in Bulgaria - South Stream Bulgaria AD (Gazprom and Bulgarian Energy Holding 50% each) were established.
On June 19, 2010 a tripartite memorandum between Gazprom, Eni and France's EDF was signed. This document permitted EDF to join as a shareholder of South Stream AG.
On March 21, 2011 Chairman of the Gazprom Board, Alexey Miller and BASF CEO, Jürgen Hambrecht signed a memorandum of understanding for the South Stream project involving Wintershall Holding GmbH in the realization of the offshore section of the project.
The document defines the key terms and conditions of the German companies in the offshore section of the project. In particular, the memorandum stipulates that the share of Wintershall Holding GmbH in South Stream AG will be 15% whilst preserving Gazprom’s 50% stake.
On September 16, 2011 new shareholders from Germany and France were included in South Stream. Chairman of Gazprom, Alexey Miller, General Manager of the Eni group, Paolo Scaroni, and member of the Board of Executive Directors of BASF, Harald Schwager, President and Chief Executive Officer of EDF, Henri Proglio signed a Shareholders' Agreement for the offshore section of the South Stream project. As a result, interest in the offshore section of the South Stream project is as follows: Gazprom - 50%, Eni - 20%, Wintershall and EDF - 15% each.
In early March 2010, the consolidated feasibility study (FS) was completed. It is produced on the basis of a feasibility study of the offshore section and land plots in the countries through which the pipeline will run. The consolidated feasibility study showed that the South Stream project is cost-effective and technically feasible.
On November 30, 2011 the Council of Ministers of Bulgaria decided to award national importance to the construction of the South Stream project in this country. This will reduce the time required for the environmental assessment and land acquisition process, and thus accelerate the work on the Bulgarian section of the pipeline. South Stream is recognized as a national object, in accordance with the Law on Spatial Planning and the Law on State Property Bulgaria.
On March 3, 2012 after negotiations between the Head of the Gazprom Project Management Department, Leonid Chugunov, the Prime Minister of Montenegro, Igor Luksic, Minister of Foreign Affairs and European Integration, Milan Pochenom and the Economy Minister, Vladimir Kavarichem it was decided to develop a feasibility study for the construction of a gas pipeline outlet in Montenegro as part of South Stream.
On March 22, 2011 Gazprom and the participants from the Slovenian company Plinovodi signed the South Stream Slovenia agreement, created on a parity basis for implementing the South Stream in Slovenia. The Joint project company was registered on 5 September 2012. Its activities include the preparation of project documentation, arranging financing, construction and operation of the Slovenian section of the pipeline.
On June 26, 2012 the Government of Srpska Republic in Bosnia and Herzegovina granted the South Stream national project status and announced its implementation as a strategic goal. The gas pipeline will bring gas to all the cities and municipalities in the Srpska Republic.
On October 29, 2012 in Serbia, the Head of Project Management at Gazprom, Leonid Chugunov and CEO of Srbijagas, Dusan Bajatovic signed the final investment decision for the South Stream project.
On October 31, 2012 in Hungary a positive final investment decision on the construction of the Hungarian section of the South Stream gas pipeline was accepted, according to which the length of the pipeline will be 229 km. The document was signed by Gazprom Export CEO, Alexander Medvedev and Csaba Baji CEO of MWM. Under this new agreement they were invested as shareholders of the joint project company South Stream Hungary. In addition, the Hungarian party granted the status of national importance to the South Stream project.
On November 13, 2012 in Moscow, Chairman of Gazprom, Alexey Miller and CEO of Plinovodi, Marjan Eberlints signed the final investment decision to build the Slovenian section of the South Stream pipeline.
On November 14, 2012 at a meeting of the Board of Directors of South Stream Transport AG in Milan, the Board of Directors of Gazprom, Eni, EDF and BASF - Alexey Miller, Paolo Scaroni, Henri Proglio and Harald Schwager - signed a final investment decision on the sea part of the South Stream project.
On November 15, 2012 in Sofia, in the presence of the Prime Minister, Boyko Borisov, Alexei Miller, and the Executive Director of Bulgarian Energy Holding (EAD), Mihail Andonov signed an agreement on the final investment decision for the construction of the South Stream gas pipeline in the Republic of Bulgaria. On the same day Gazprom Export and Bulgargaz EAD signed a long-term contract for the annual supply of 2.9 billion cubic meters of Russian natural gas for 10 years. After the completion of South Stream in Bulgaria, the natural gas under this contract will be delivered by the new pipeline.
On December 7, 2012 at the Russkaya compressor station site in the presence of Russian President Vladimir Putin and the high-ranking guests the gas transportation systems of Russia and Europe were symbolically welded together and inaugurated the launch of the South Stream gas pipeline construction.
On January 17, 2013 in Zagreb Alexey Miller and Chairman Of The Board of «Plinacro d.o.o» Mladen Antunovic inked an Action Plan to implement the South Stream project in Croatia between 2013 and 2016. The document envisages that a joint project company for constructing a branch of South Stream gas pipeline to Croatia will be set up at the beginning of the second half of 2013. The spatial planning and environmental impact assessment procedures required by national law are currently at their final stage.
Gazprom achieved record daily supply volumes – 14.12.2012
South Stream gas pipeline construction starts up – 07.12.2012
South Stream is progressing – 24.12.2010