The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Paolo Scaroni, Chief Executive Officer of ENI concern.

The parities addressed the prospects for cooperation deepening in the oil and gas sector, placing an emphasis on the interaction under the Strategic Partnership Agreement.

Alexey Miller and Paolo Scaroni approved the work being done within the South Stream project pre-investment stage. A follow-up plan relevant to the pipeline’s submerged section construction was discussed. The parties expressed a unanimous opinion that the South Stream, adding to the diversification of Russian gas flows to Europe, was strategically important for ensuring the energy security on the entire continent.

“We observe an increased demand for Russian gas in Europe over the recent two months. So far, daily gas consumption has already exceeded the level reached before the crisis. Due to gradual depletion of reserves on the continent, it will be impossible to meet the European gas demand in a sustainable manner without additional Russian gas supply routes, including the South Stream,” said Alexey Miller.

Background:

Italy is the third-largest Russian gas importer in Europe. In 2008 Gazprom supplied Italy with 22.4 billion cubic meters of natural gas.

In November 2006 Gazprom and ENI entered into the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market starting from 2007. Gas supply volumes will be gradually increased to 3 billion cubic meters per annum by 2010. Under the Agreement the existing contracts for Russian gas supplies to Italy have been extended till 2035.

On June 23, 2007 Gazprom and ENI inked the Memorandum of Understanding for the South Stream project implementation. The Memorandum sets the areas of cooperation between the two companies in designing, financing, constructing and managing the South Stream.

On January 18, 2008 South Stream AG, a special-purpose company was registered in Switzerland. South Stream AG was incorporated by Gazprom and ENI on a parity basis.

On May 15, 2009 Gazprom and ENI signed the second Addendum to the Memorandum of Understanding stipulating an increase in annual throughput capacity of the pipeline’s submerged section from 31 to 63 billion cubic meters of gas, as well as regulating the gas marketing issues within the project.