Today in Vienna Alexey Miller, Chairman of the Gazprom Management Committee, and Dr. Wolfgang Ruttenstorfer, CEO and Chairman of the Executive Board of OMV signed a Framework Agreement of Cooperation under the South Stream project on the territory of the Republic of Austria.

The agreement sets forth conditions and deadlines for implementation by Gazprom and OMV of the Austrian section of South Stream and stipulates principles and mechanisms of the parties’ interaction at the pre-investment stage of the project.

 The agreement stipulates that in the near future the parties will set about developing a feasibility study of the Austrian section of South Stream. The feasibility study is aimed at an extensive evaluation of all technical, legal, financial, environmental and economic indicators and parameters. Gazprom and OMV will also set up on a parity basis a joint engineering company for design, financing, construction and operation of Austria’s section of South Stream with a minimum annual capacity of 5–10 billion cubic meters.

It is assumed that within the implementation of the South Stream project on the territory of Austria OMV will be supplied on a long-term basis with additional 2 billion cubic meters of natural gas.

“Today is an important day in the South Stream history. By acknowledging on the inter-governmental level its commitment to take part in the development of an additional route of transportation of Russian gas to Europe, Austria became the seventh country participating in the onshore part of the project. Gazprom and its partner entered into a framework agreement on the implementation of South Stream in Austria.

According to currently achieved arrangements the basic gas pipeline will be laid via at least seven European countries and stretch for thousands of kilometers. Once the gas pipeline is constructed South and Central Europe will be forever safe from and secured against transit crises and cold winters,” – Alexey Miller said.

“Through the South Stream Pipeline, OMV’s Baumgarten distribution node will further increase its importance as Central Europe’s major gas turntable. As for Central European Gas Hub, already one of the most important gas trading platforms in continental Europe, this additional liquidity at its main trading point will also provide strong momentum and clear support as it seeks to become the leading gas hub in continental Europe,” –  Wolfgang Ruttenstorfer said.

Background:

For the purpose of diversifying export routes of supply of natural gas OAO Gazprom plans to construct a gas pipeline running under the Black Sea to the countries of the South and Central Europe: the South Stream project.

The offshore section of the gas pipeline is planned to be laid under the Black Sea from the main compressor station Russkaya on the Russian coast to the Bulgarian coast. Its total length will be around 900 kilometers, the maximum depth – over two kilometers.

Annual capacity of the offshore section of South Stream will be up to 63 billion cubic meters.

For the implementation of the onshore section of the project abroad intergovernmental agreements have been signed with Bulgaria, Serbia, Hungary, Greece, Slovenia and Croatia. On April 24, 2010 a respective agreement was signed with Austria.

OMV has been the main partner of OAO Gazprom in Austria for more than 40 years.