Pipeliners

PORTO CERVO, June 10 (Reuters by Stephen Jewkes) - The South Stream gas pipeline that will transport Russian gas into Europe will have no funding difficulties and will be operative by the end of 2015, Gazprom Chief Executive Alexei Miller said on Wednesday. "The current capex plans will be honoured 100 percent. There are no problems whatsoever in funding it," Miller said, speaking to reporters on the sidelines of a conference. South Stream, which will have a capacity of 63 billion cubic metres per year, will be built by Gazprom and Italy's Eni and will cross the Black Sea to reach Bulgaria, Greece, Serbia, Hungary, Italy and possibly Austria. "It is not competing with the Nabucco project," he said, adding the feasibility study for the project will be decided by mid-2010. Nabucco is a rival pipeline project backed by the European Union. Miller said that a figure had already been set for the amount of gas Eni will be able to sell in the transit countries of South Stream but refused to give the number. Miller also commented on problems with supply of gas from Ukraine and Turkmenistan. Miller said Ukraine can and should pay for the gas it receives. He acknowledged Ukraine had paid for its May gas imports, adding payment had come from reserves of the Ukraine central bank, "an unorthodox solution", he said. Moscow cut supplies to Ukraine, and later to Europe, in January during a three-week stand-off over Ukraine state energy company Naftogaz's debts and the price of gas. He said Ukraine now needed to pump in some 19.5 billion cubic metres of gas to replenish its storage sites which will cost around $4.2 billion, adding that Ukraine's daily gas offtake fell sharply this week from last week. "I will have a meeting with the Naftogaz head next week to see what's happening," he said. Miller said he hoped the European Union summit on June 18-19 would discuss the creation of a joint EU-Russian consortium to help fund EU gas supplies. Asked when and under what terms Gazprom would restart Turkmenistan gas purchases, Miller said: "I intend to visit Turkmenistan in the next few days to discuss the gas situation". Turkmenistan and Russia have been in talks since April over how to resume the flow of gas after it was severed by a gas pipeline explosion, which Turkmenistan says Russia caused. Miller said that there is more gas than necessary in Europe today, adding no shortages are foreseeable in the short or long term. He said only 5 percent of reserves in the Arctic offshore fields have been explored. Development of the giant Shtokman gas field, which has estimated reserves of 3.7 trillion cubic metres, has not been delayed, Miller said, adding "an investment decision will be taken by March 2010". The North Stream pipeline project was also on schedule and will be commissioned in 2011. "It's a very important project and the cheapest export corridor for Russian gas," he said. North Stream is planned to link Germany and Russia via the Baltic Sea. Asked about Gazprom's interest in Slovenia's Petrol company, Miller said no decision had been taken yet. "We have received an offer (to buy) it," he said.