Today in Sochi Alexey Miller, Chairman of the Gazprom Management Committee, and Dusan Bajativic, Director General of Srbijagas, signed a Basic Cooperation Agreement on implementation of the South Stream project on the territory of Serbia.

The document stipulates the principles of interaction between the parties on the pre-investment stage of the project and determine the conditions and rules for the creation, as well as operation mechanisms for joint venture (JV) that will be set up for the design, construction and operation of the Serbian section of South Stream. Gazprom will hold 51% in the JV, Serbiagaz – 49%.

The joint venture will prepare feasibility study for the gas pipeline on the territory of Serbia. The study will contain detailed assessment of all technical, legal, financial, environmental and economic characteristics and indicators of the project.

Until the final investment decision is made regarding the implementation of the South Stream project, management committee and joint working group, to be created by Gazprom and Srbijagas, will engage in detailed design of technical assignments in the framework of feasibility study preparation for Serbian pipeline section, as well as in regulating current activities of joint venture.

Background:

For the purpose of diversifying natural gas export routes OJSC Gazprom is exploring the possibility of constructing a gas pipeline across the Black Sea to South European and Central European countries – the South Stream project.

To implement the onshore section of the Project outside Russia, intergovernmental agreements were signed with Bulgaria, Serbia, Hungary and Greece.

The provisions of the above mentioned agreements stipulate establishing joint ventures responsible for the FS development, as well as for the further engineering, construction and operation of the South Stream gas pipeline in the signatory countries provided that the technical practicability and economic viability assessments are confirmed.

On December 24, 2008 Gazprom and Serbiagaz signed the Basic Terms of the Basic Cooperation Agreement on implementation of the South Stream project on the territory of Serbia.