The Gazprom Management Committee took note of the information on the progress with the South Stream gas pipeline construction and implementation of associated projects in Russia.

It was pointed out that South Stream was progressing in strict compliance with the schedule.

The Bulgarian Republic will soon sign contracts for materials and equipment procurement as well as for installation works, personnel training and commissioning of a pipeline section.

Similar activities are being carried out in the Republic of Serbia.

The main construction operations in Bulgaria and Serbia are scheduled for this summer.

In Hungary FEED is currently underway in addition to the spatial planning and environmental impact assessment (EIA) activities.

In the Republic of Slovenia the spatial planning and EIA are also in progress; bids to design the Slovenian section will be announced before the beginning of summer.

The Republic of Croatia goes on generating the Shareholders Agreement of the joint project company; the draft contract and scope of work for devising the project documentation are being negotiated.

The investment concept is being developed for constructing a gas branch to the Republic of Macedonia.

Intergovernmental agreements for the project have been signed with all the above mentioned countries.

In the Republika Srpska an intergovernmental agreement is being drafted to provide cooperation during the construction and operation of South Stream's branch and power facilities.

Upon the initiative of the Austrian party, Gazprom started examining the possibility of creating a gas pipeline section in Austria simultaneously with the Slovenian section being constructed.

Arrangements for laying South Stream's offshore section are in full swing. The companies that won the open tender are intensely building up the pipe production for the first string. The agreement was signed for the gas pipeline construction as well as for the process facilities construction and the landfalls infrastructure development for four offshore gas pipeline strings in Russia and Bulgaria. Pipe supply to Bulgaria will start as soon as this May. In June the operations will start on the Russian coast, in July – in Bulgaria. The offshore pipeline laying will begin this autumn.

The meeting stressed that some 8.5 thousand jobs would be created in Bulgaria, Serbia, Hungary, Slovenia and Croatia to build and subsequently operate South Stream.

First gas will be delivered via the gas pipeline in late 2015.

Operations are well underway at the Russkaya main compressor station, which is South Stream's starting point. It will be the world's leader in terms of installed capacity, which is 448 MW. The core process equipment, i.e. gas compressors and treatment units, are being installed at the station. This work will be completed in 2014.

Large-scale construction is currently in process at the Southern Corridor gas trunkline system to feed gas to South Stream. On the western route (Phase 1 of the project) 576 kilometers of pipes (65 per cent of its total length) have been welded and laid. Many gas pipeline sections are being tested. Compressor stations (CS) are under construction. The core process equipment is being installed at the Kazachya CS and the Korenovskaya CS, which will be completed in the first quarter of 2015; the foundation is being constructed at the Shakhtinskaya CS.

Preparations for the eastern route (Phase 2 of the project) construction have begun.

With a view to supply the required volumes of gas via the western route, the Urengoy – Novopskov gas pipeline is being expanded at the Petrovsk – Pisarevka section. By now, some 170 kilometers of the gas pipeline have been overhauled.

The upgrade of the three out of six compressor stations – Yekaterinovka, Bubnovka and Pisarevka – is in progress with a purpose to increase their capacities. The core process equipment is being installed there. The Yekaterinovka CS and the Bubnovka CS upgrade is to be finished by late 2014, the Pisarevka CS – in the second quarter of 2015. Once the upgrade is over, the Bubnovka CS and the Yekaterinovka CS capacities will total 96 and 64 MW respectively.

“Only South Stream may offer now extra guarantees of energy security to Europe,” said Alexey Miller.

Background

The South Stream gas pipeline is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. The gas pipeline will reach its full capacity in 2018.

The offshore section exceeding 930 kilometers will run from the Russian coast near Anapa to Bulgarian Varna at the depth of over 2,200 meters. A 1,455-kilometer onshore section will cross Bulgaria, Serbia, Hungary, Slovenia, Italy and possibly Austria. Gas branches from the main pipeline route will be built to Croatia, Macedonia and Republika Srpska.

At present, the South Stream construction is underway in Russia (from December 7, 2012), Bulgaria (from October 31, 2013) and Serbia (from November 24, 2013).

The construction of the Southern Corridor gas pipeline system is the prerequisite for the South Stream operation. It will cross eight Russian constituent entities, providing for the additional natural gas supply to the central and southern parts of Russia as well as securing the uninterrupted supplies to South Stream. The project is to be delivered in late 2017.

Phase 1 – the western route – stipulates the construction of a gas transmission system from the Pisarevka CS in the Voronezh Region to the Russkaya CS (the main compressor station of South Stream's offshore section).

The western route's length will total 880.6 kilometers, including the interconnector between the Kubanskaya CS and the Korenovskaya CS; the compressor stations capacity will be 574 MW.

Phase 2 – the eastern route – contemplates constructing a gas transmission system from the Pochinki CS in the Nizhny Novgorod Region to the Russkaya CS in the existing corridor: Pochinki – Izobilnoye – Severo-Stavropolskoye UGS facility. The eastern route's length will total 1,625.6 kilometers, the compressor stations aggregate capacity will be 942 MW.