Milan(Italy) hosted yesterday a meeting of the South Stream Transport Board of Directors.

The Board of Directors which includes representatives from Gazprom, Eni, EDF and BASF discussed the key issues of the South Stream project and adopted the final investment decision for the offshore gas pipeline section.

“The South Stream project makes a great contribution to ensuring the European energy security. It allows creating alternative and reliable routes of natural gas supply to our consumers. Let me congratulate everyone on the decision made today by the Board of Directors. It marks the start of the South Stream project realization,” said Alexey Miller.

The meeting also approved incorporation of South Stream Transport B.V. in Amsterdam (the Netherlands). It was highlighted that the offshore section of South Stream would be built in line with the terms and conditions approved by the Board of Directors in early 2012.

Background

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 offshore section of the South Stream gas pipeline will run under the Black Sea from the Russkaya compressor station to the Bulgarian coast. The total length of the Black Sea section will exceed 900 kilometers, its maximum depth will be more than two kilometers, design capacity – 63 billion cubic meters.

On September 16, 2011 the Shareholders Agreement of South Stream Transport AG was signed for implementation of the offshore gas pipeline section. According to the document, Gazprom holds a 50 per cent stake in the project, Italian Eni – a 20 per cent stake, German Wintershall Holding and French EDF – 15 per cent stakes each. On April 12, 2012 Gazprom's foreign partners finally joined the South Stream Transport AG project company.

On December 30, 2011 Vladimir Putin, Prime Minister of the Russian Federation authorized Gazprom to speed up the launch of the South Stream project and to start its construction in 2012.

On January 20, 2012 Alexey Miller, Chairman of the Gazprom Management Committee approved the detailed action plan enabling to launch the South Stream offshore section construction in December 2012.

First gas supplies via the gas pipeline are scheduled for late 2015.