Gas pipeline deal from Russia to Bulgaria signed

Italian energy company Eni SpA and Russia’s state-controlled OAO Gazprom on Saturday said they signed a memorandum of understanding on the possibility of supplying Russian gas to European Union countries through a pipeline under the Black Sea.

The deal, under which the two companies will undertake a feasibility study, was announced at a news conference by Eni chief Paolo Scaroni and a top Gazprom executive, Alexander Medvedev.

Gazprom energy executives had held talks earlier in the week with Eni and Italian government officials.

The pipeline, to be called South Stream, would run under the Black Sea and through Bulgaria, and distribute gas to northern and southern Europe. Implementation of the project depends on the receipt of all necessary authorization and whether the studies show the plan to be technically possibly and economically feasible, Eni said.

Under the plan, more than 900 kilometers (550 miles) of pipeline would be laid down under the sea and across the new EU member before splitting off in two directions, north through Hungary to reach Austria, and south through Greece and on to Otranto, a port near the southeastern tip of Italy, the Italian news agency Apcom said.

Italian company Saipem SpA has already begun a preliminary study, Eni said.

“The South Stream project aims at strengthening energy security in Europe,” said Italian Industry Minister Pierluigi Bersani, who attended the signing along with Russia’s energy minister.

“We thought of launching a plan for the European Union that would reinforce the network of gas transport and increase the interconnections between eastern Europe and western Europe,” Scaroni told the news conference.

An Eni statement quoted Medvedev as describing the memorandum as part of Gazprom’s strategy aimed at “diversifying the paths of supplying Russian gas to European countries and at notably guaranteeing Europe’s energy security.”

Economic ties between the two countries have been boosted primarily in the energy sector, as last year Gazprom concluded an asset-swap deal with Eni, Italy’s biggest oil and gas company.
Source: AP

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