Saint Petersburghosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Paolo Scaroni, Chief Executive Officer of Eni.

The parties discussed the issues of bilateral cooperation in the energy sector. Special emphasis was placed on Russian gas supplies to Italy under the existing long-term contracts.

The meeting also addressed the cooperation within the Blue Stream project and the progress with the South Stream project. It was pointed out that the project was progressing in strict compliance with the schedule.

Background

Italyis the second largest importer of Russian gas in the European Union after Germany. In 2011 the amount of gas supplied by Gazprom to Italy equaled some 15.1 billion cubic meters.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement. Under the Agreement, the existing contracts for Russian gas supplies to Italy were extended until 2035 and Gazprom began to directly supply the Italian market with natural gas in the amount of up to 3 billion cubic meters a year and was entitled to acquire stakes in Eni's international assets.

For the purpose of diversifying natural gas export routes Gazprom is constructing a gas pipeline across the Black Sea to Southern and Central Europe – the South Stream project. The design capacity of the offshore gas pipeline section will amount to 63 billion cubic meters a year.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria in order to implement the onshore gas pipeline section.

On September 16, 2011 the South Stream Transport Shareholders Agreement was signed for implementation of the offshore gas pipeline section. As a result, Gazprom acquired a 50 per cent stake in the project, Eni – a 20 per cent stake, Wintershall Holding and EDF – 15 per cent stakes each.

In the third quarter of 2011, the Consolidated Feasibility Study of South Stream was finalized and included the feasibility study of the offshore section and feasibility studies of the respective gas pipelines in the host countries of Southern and Central Europe.

On December 7, 2012 the South Stream gas pipeline construction was launched. First gas supplies via the gas pipeline are scheduled for late 2015.