Russia’s South Stream pipe shores up hefty contracts

Russia’s massive South Stream pipeline project for transporting gas to southern Europe took a big step forward today (29 January) as three companies secured €1 billion worth of contracts to supply part of its offshore section.

The 2,400 km (1,500-mile) pipeline, which Russian state-controlled gas producer Gazprom says will be fully operational by 2018, would be able to supply almost 15% of Europe’s annual gas demand, pumping Russian gas through the Black Sea into southeastern Europe.

It would bypass Ukraine, with whom Russia has had several gas transit disputes in the past years.

The project has been frequently put into doubt over legal conflicts with the European Union and its economic viability.

But South Stream made a big step forward on Wednesday after Europipe, OMK and Severstal secured the contracts to supply a first subsea section of the pipeline.

Germany’s Europipe will supply half of the pipes, Russia’s OMK will deliver another 35%, and Severstal’s Izhora Pipe Mill in Russia will provide the remaining 15%.

The contracts announced on Wednesday are for the first of four parts of the subsea section of South Stream.

“The pipeline delivery is planned to begin in the summer and to last until mid-2015,” Gregoire Richez, commercial director of South Stream Transport, told Reuters, adding the tender for pipeline supply for the next stage was under way.


SOURCE: EurActiv, 2014


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