Pipeliners

// Gazprom can get to Italy through Slovenia
Apr. 14, 2008 - Kommersant by Natalia Grib -  Gazprom is discussing a new route for the South Stream natural gas pipeline from Russia to the European Union, across the Black Sea, from Serbia to Slovenia and then into northern Italy. Gazprom head Alexey Miller has already received the support of Slovenian President Danilo Turk and Prime Minister Janez Jansa. The public announcement of those negotiations was meant to show Austria, with which Gazprom's relations had become tense, that South Stream could go around it. On Friday, Gazprom announced that its CEO, Alexey Miller, had been in talks with the president and prime minister of Slovenia in Ljubljana on the implementation of the South Stream project. The prospects for long-term cooperation between the countries in the sphere of natural gas were discussed at the negotiations. Slovenia, which is the chairman of the European Union at the moment, has been received a small supply of gas from Russia since 1978. Gazprom Export supplied the country with 590 million cu. m. of gas in 2007. Gazprom and Slovenian government spokesmen declined to comment on the negotiations in more detail. The possibility of Slovenia's inclusion in South Stream seems unexpected. It had been thought that the land route for the pipeline was decided” emerging from the Black Sea in Bulgaria, it was to cross Serbia into Hungary, then lead into Austria and from there to the north of Italy. Another branch was to cross Greece to the south of Italy. (That agreement is to be signed by the end of the month.) Mikhail Shein of BrokerCreditService, thinks Miller's announcement is a warning to Austria. The essence of the announcement is that the South Stream pipeline will change its course and go from Russia to Bulgaria, Serbia and Hungary, but them not to Austria, but to Slovenia and from there to northern Italy. According to East European Gas Analysis director Mikhail Korchemkin, relations between Gazprom and the Austrian OMV company soured in January just after they signed a cooperation agreement. According to their agreement, Gazprom should receive 50 percent of the Central European Gas Hub (the Austrian trading platform) in Baumgarten, and build an underground gas reservoir with OMV in Austria and neighboring countries. Within a few days, it became known that the monopoly was refusing to sell gas to traders who had reserved capacity on the Trans-Austrian gas pipeline, Korchemkin said. He repeated the words of Gazprom Export department head Vladimir Khandokhin that the company “won't sell gas to owners of pipeline capacity because it contradicts Gazprom's strategy of increasing direct sales to the final consumer.” Korchemkin said that Gazprom and OMV “simply didn't divide up the Austrian domestic market.” The South Stream pipeline project has a capacity of 30 billion cu. m. of natural gas per year. It is being implemented by Gazprom and the Italian Eni as equal partners. The pipeline is to go from Russia, across the Black Sea into Bulgaria and then in two branch into northern and southern Italy. It is due to be completed in 2013. Thus the final transit country for the northern branch of South Stream is in question. Neither Austria nor Slovenia has signed an agreement on entry the project, and Kommersant sources at Gazprom and Russian government agencies say that there may be more than one choice. Natalia Grib