Proposed route of South Stream
|From||Beregovaya compressor station, Dzhubga|
|Passes through||Black Sea
Électricité de France
|Operator||South Stream Transport AG
National project companies
|Length||2,380 km (1,480 mi)|
|Maximum discharge||63 billion cubic metres per annum (2.2×1012 cu ft/a)|
|Number of compressor stations||9|
South Stream (Russian: Южный Поток, Bulgarian: Южен поток, Serbian/ Slovene: Južni tok, Hungarian: Déli Áramlat) is a planned gas pipeline to transport Russian natural gas through the Black Sea to Bulgaria and further to Greece, Italy and Austria. The project is seen as rival to the planned Nabucco pipeline. Construction started in December 2012. Expected to be functional by 2018, the project has been described as "dead" by European officials, and the European Union is close to freezing plans to complete the project.
The South Stream pipeline project was announced on 23 June 2007, when the Chief Executive Officer of Italian energy company Eni Paolo Scaroni and the Vice-Chairman of Russian Gazprom Alexander Medvedev signed in Rome a Memorandum of Understanding (MOU) for construction of South Stream. On 22 November 2007, Gazprom and Eni signed in Moscow an agreement about establishing a joint project company for the commissioning of the marketing and technical feasibility studies of the project.
The preliminary agreement between Russia and Bulgaria on Bulgaria's participation in the project was signed on 18 January 2008. It was agreed to set up an equally owned company to build and operate the Bulgarian section of the pipeline. The agreement was ratified by Bulgarian Parliament on 25 July 2008. The first agreement between Russia and Serbia was signed even before announcement of the South Stream project. On 20 December 2006, Gazprom and Serbian state-owned gas company Srbijagas agreed to conduct a study on building a gas pipeline running from Bulgaria to Serbia. On 25 January 2008, Russia and Serbia signed an agreement to route a northern pipe of South Stream through Serbia and to create a joint company to build the Serbian section of the pipeline and large gas storage facility near Banatski Dvor in Serbia. On the same day, Russia and Hungary agreed to set up an equally owned joint company to build and operate the Hungarian section of the pipeline. On 29 April 2008, Russia and Greece signed an intergovernmental agreement on cooperation in construction and operation of the Greek section of South Stream.
On 15 May 2009, in Sochi, in presence of the Prime Minister of Russia Vladimir Putin and the Prime Minister of Italy Silvio Berlusconi, the gas companies of Russia, Italy, Bulgaria, Serbia and Greece signed an agreement on construction of the South Stream pipeline. On 6 August 2009, the Prime Minister of Russia Vladimir Putin and the Prime Minister of Turkey Recep Tayyip Erdoğan in attendance of the Prime Minister of Italy Silvio Berlusconi signed a protocol routing the pipeline through the Turkish territorial waters. On 14 November 2009, followed the talks between Slovenian Prime Minister Borut Pahor and Russian Prime Minister Vladimir Putin, the agreement on the terms of which a part of the pipeline will run through Slovenia to Northern Italy was signed by Russian Energy Minister Sergei Shmatko and Slovenian Economy Minister Matej Lahovnik in Moscow. As per earlier 2008 agreement between two countries, on 17 November 2009, Russian Gazprom and Serbian Srbijagas created South Stream Serbia AG in Bern, Switzerland. The joint engineering company will prepare feasibility study of the Serbian section of project. If agreement on investment is reached, the new joint venture will be also responsible for design, financing, construction and operation of the pipeline in Serbia.
On 2 March 2010, Russian Energy Minister Sergei Shmatko and Croatian Economy, Labor and Entrepreneurship Minister Djuro Popijac in the presence of the Prime Minister of Russia Vladimir Putin and Prime Minister of Croatia Jadranka Kosor signed an agreement on construction of a South Stream section through Croatia. On 19 June 2010, Gazprom, Eni, and Électricité de France published a joint press release confirming that EDF will join the project. On 21 March 2011, Slovenia and Russia signed an agreement regarding the establishment of a joint venture South Stream Slovenia. This makes the route of the pipeline through Slovenia much more probable.
The joint venture South Stream AG, equally owned by Gazprom and Eni, was registered on 18 January 2008 in Switzerland. However, on 16 September 2011, a shareholders' agreement was signed between Gazprom, Eni, Électricité de France and Wintershall to establish the new project company South Stream Transport AG for the Black Sea section of the pipeline. The company was incorporated on 3 October 2011 in Zug, Switzerland.
On December 28, 2011 Turkey issued its final agreement for allowing the pipeline to pass through its territorial waters. The final investment decision for the Serbian section was signed on 29 October 2012, for the Hungarian section on 2 November 2012, for the Slovenian section on 13 November 2012, and for the Bulgarian section on 15 November 2012. On 15 November 2012, shareholders of South Stream Transport AG signed the final investment decision on the offshore section. The ground-breaking ceremony marking start of construction of the Russian onshore facilities was held on 7 December 2012 at the Russkaya compressor station near Anapa.
On 25.07.2013 The Vice Premier and Finance Minister of Republic of Macedonia, Mr. Zoran Stavreski signed the agreement on construction of a South Stream section through Republic of Macedonia.
The national gas distribution company "Makedonski Energetski Resursi" will work jointly with Gazproms on a technical solution over the destination of the gas pipeline branch trough the country.
In April 2014 part of the South Stream pipe was disassembled in Bulgaria.
On 17 April 2014, (amid the 2014 pro-Russian unrest in Ukraine) and whilst also insisting on more sanctions against Russia and especially its energy companies, the European Parliament adopted a resolution opposing the South Stream gas pipeline and recommending a search for alternative sources of gas supplies for the European Union.
The Russian onshore section will run from the Pochinki compressor station to the Russkaya compressor station near Anapa. The 925-kilometre (575 mi) long offshore section will run from the Russkaya compressor station through the Black Sea to Bulgaria's city of Varna. Because of the Russia–Ukraine gas disputes, the pipeline is routed through Turkey's waters to avoid the exclusive economic zone of Ukraine.
The 1,455-kilometre (904 mi) long onshore section starts from Varna and runs to Pleven. From there, the southwestern route, was to continue through Greece and Ionian Sea to southern Italy. However, this route was abandoned. The northwestern route will continue from Pleven to Serbia. In Serbia, it will run through Zaječar, Beograd and Subotica. From Subotica pipeline will run through Hungary and Slovenia to Arnoldstein in Austria near the Italian border to supply northern Italy. Two branches to Croatia, and Bosnia and Herzegovina are foreseen. Srbijagas plans to construct along Sava river a 480-kilometre (300 mi) long branch pipeline with a capacity of 1.2 billion cubic metres (42 billion cubic feet) to Banja Luka and Sarajevo. It is possible that also Montenegro will be connected to the pipeline.
The feasibility study of the offshore section was conducted by Saipem, a subsidiary of Eni. Planning was done by INTECSEA, a subsidiary of WorleyParsons. Giprospetsgas, an affiliate of Gazprom, has been appointed as a general design contractor. The offshore pipeline is planned to carry 63 billion cubic metres (2.2 trillion cubic feet) of natural gas per year. It will have four parallel lines with capacity of 15.75 billion cubic metres (556 billion cubic feet) each. The offshore pipeline will use pipes with a diameter of 32 inches (810 mm), designed for 27.73 megapascals (4,022 psi) of working pressure and having the pipe wall thickness of 39 millimetres (1.5 in). The first line should be ready by the end of 2015, the second and third lines by the end of 2016, and the forth line by the end of 2017. The offshore section is expected to cost €10 billion.
Pipeline sections in Bulgaria, Serbia, Hungary, and Slovenia will have capacity at least 10 billion cubic metres (350 billion cubic feet) per year. The onshore pipeline will have eight compressor stations and it is expected to cost €6 billion.
At least two gas storage facilities would be constructed of which one would be an underground storage facility in Hungary with capacity of minimum 1 billion cubic metres (35 billion cubic feet) and another one in Banatski Dvor, Serbia with capacity of 3.2 billion cubic metres (110 billion cubic feet). Hungarian oil and gas company MOL Group has offered its empty natural gas field at Pusztaföldvár as a 9 billion cubic metres (320 billion cubic feet) storage facility. British Melrose Resources is planning to convert the Galata offshore field in Bulgaria to a gas storage facility with initial capacity of 1.7 billion cubic metres (60 billion cubic feet) by 2009. There are also allegations that the South Stream pipeline will be connected to the Wingas-owned Haidach gas storage.
The pipeline will be built and operated by several project companies. For the construction and operation of the offshore section of South Stream originally two companies were established, both in Zug in Switzerland with the share capital of 100,000 CHF. South Stream AG, a joint venture between Gazprom and Eni was incorporated on 18 January 2008, and South Stream Transport AG, a joint company of Gazprom, Eni, Électricité de France, and Wintershall was incorporated on 3 October 2011. Head of South Stream Transport AG is Marcel Kramer, former chief executive officer of the gas transportation company Gasunie. Gazprom owns 50% of shares of South Stream Transport AG, Eni 20%, and Électricité de France and Wintershall 15% both. In November 2012, it was decided to incorporate South Stream Transport B.V., the current project company, in Amsterdam. Earlier Eni had registered in Amsterdam a company named South Stream BV, but in February 2012 it was renamed Eni JPDA 11-106 BV.
The Bulgarian section of the pipeline will be built and operated by a joint venture of Gazprom and Bulgargaz and the Serbian section by the joint venture of Gazprom and Srbijagas. The Hungarian section will be built and operated by the equally owned joint venture between Gazprom and the state-owned Hungarian Development Bank MFB, which will buy the elaborated feasibility study of Hungarian section from SEP Co., a joint venture of Gazprom and MOL. The Slovenia section will be built and operated by an equally-owned joint venture of Gazprom and Geoplin Plinovodi. For construction of the Croatian section a 50-50 Russian-Croatian joint company will be established.
Nabucco pipeline project
The South Stream project is seen as a rival to the projected Nabucco pipeline. There are doubts about the feasibility of South Stream project, since it may cost twice as much as Nabucco, which was initially expected to cost €12–15billion. Some experts claim that the South Stream pipeline is a political project to counter Nabucco and to expand Russian presence in the region.
Russian President (then First Deputy Prime Minister) Dmitry Medvedev and former Hungarian Prime Minister Ferenc Gyurcsány have stated that there is no contradiction between South Stream and the Nabucco pipeline project, designated to bring Caspian (Azerbaijani) gas to Southern and Central Europe via Turkey. "South Stream will have no negative impact on Nabucco, just as Nabucco will have no negative effect on South Stream," Dmitry Medvedev said during his visit to Hungary on 25 February 2008.
On 10 March 2010, CEO of Eni Paolo Scaroni proposed to merge Nabucco and South Stream projects to "reduce investments, operational costs and increase overall returns". This proposal was rejected by energy minister of Russia Sergei Shmatko saying that "South Stream is more competitive than Nabucco" and that "Nabucco and South Stream are far from being competitors". Also OMV, a partner in the Nabucco project, has said that there are no ongoing discussions about merging the projects.
Conflict with Ukraine
South Stream has been seen as diverting some gas exported through Ukraine, instead of providing a new source of gas for Europe. At the same time, a bigger part of the offshore route of South Stream was expected to be laid through the continental shelf of Ukraine. Although Ukraine had limited opportunities to ban the project, the laying pipeline on the continental shelf of Ukraine would require a large-scale environmental impact assessment study and environmental permits from Ukrainian authorities. There were speculations that Ukraine would permit the construction of South Stream in exchange for Russian permit to build the White Stream offshore gas pipeline from Georgia to Ukraine. To avoid Ukrainian exclusive economic zone, the pipeline was re-routed through the Turkish waters. In early November 2009, while meeting with Austrian Chancellor Werner Faymann, Russian Prime Minister Vladimir Putin, accused Ukraine of repeated diversion of gas bound for Europe without paying for it. "I am very much counting on our main transit partner, Ukraine, to fulfill all its contractual obligations", he said and reiterated his support for South Stream.
Offer to Romano Prodi
Before stepping down from the premiership, Italian Prime Minister Romano Prodi received an offer from Gazprom to become the Chairman of South Stream AG. This move was compared with the appointment of the former Chancellor of Germany Gerhard Schröder to lead Nord Stream AG, a consortium constructing Nord Stream pipeline. Romano Prodi has declined this offer. According to the Prodi's spokesman "Prodi was extremely flattered, but reiterated that he wants to take some time off to ponder after leaving Italian politics."
- Blue Stream
- Nord Stream
- Trans-Adriatic Pipeline
- Turkey-Greece pipeline
- Greece-Italy pipeline
- Nabucco Pipeline
- Persian Pipeline
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