Alexey Miller, Chairman of the Gazprom Management Committee held a meeting dedicated to the South Stream and Southern Corridor projects.

It was pointed out that the new route of Russian gas supply meant to increase the reliability of supply to European consumers and mitigate transit risks was being built in compliance with the schedule.

Pre-construction activities at the South Stream offshore section are in full swing. An agreement to supply pipes for the first string of the gas pipeline was signed on January 29, 2014. On February 7 a contract was concluded for the independent certification of South Stream's offshore section to ensure conformity with DNV-OS-F101, one of the main international standards. This standard specifies the requirements for design, construction and operation of offshore gas pipelines with proper consideration of security and environmental protection requirements.

It is planned to complete and promulgate the results of the bidding procedure among deep-water pipe-laying companies as well as to sign a pipe supply contract for the second offshore string of the gas pipeline before the end of the first quarter of 2014. The construction of South Stream's offshore section will start in autumn 2014.

Following Bulgaria and Serbia, Hungary will set to constructing the onshore gas pipeline in the second quarter of 2015. At present, design and survey operations are underway at the Hungarian section, spatial planning and environmental impact assessment (EIA) documents are under development for the Hungarian, Slovenian and Croatian sections.

With a view to implement power projects in Republika Srpska, an intergovernmental agreement with Bosnia and Herzegovina is being negotiated.

The meeting participants were also informed about the progress with the Southern Corridor project – a Russian gas pipeline system intended, inter alia, for feeding gas into South Stream.

The line pipe construction (Western Route, including the Kubanskaya CS – Korenovskaya CS interconnector) is currently underway as part of the project's first phase. By now, 477.5 out of 880.6 kilometers have been welded and lowered in, which accounts for 54 per cent of the whole Western Route. Hydraulic testing has been conducted at some constructed sections.

The necessary gas compressor capacities are under construction. In particular, the core process equipment is being installed at the Russkaya compressor station, which will be the global leader in terms of installed capacity – 448 MW. Similar operations are underway at the Korenovskaya and Kazachya compressor stations; the construction site is being prepared for the Shakhtinskaya compressor station.

It was emphasized that all the state-of-the-art process, engineering and construction solutions applied by Gazprom while implementing the South Stream project took account of natural & climatic and geological peculiarities of the region. At the same time, considerable efforts are aimed at maintaining a high level of security and preserving the existing ecosystems. Thus, one of the most complicated gas pipeline sections –the Kuban River crossing – was constructed using directional drilling, thereby leaving the riverbed undisturbed and having no influence on navigation and fishing.

In addition, the Urengoy – Novopskov gas pipeline is being further expanded at the Petrovsk – Pisarevka section in order to supply the necessary gas volumes via the Western Route. A junction point, a connection gas pipeline and interconnectors at the Pisarevka compressor station have already been constructed, the reconstruction of three out of six compressor stations, namely Yekaterinovka, Bubnovka and Pisarevka, has started.

The meeting resulted in assigning tasks aimed at the timely execution of the South Stream and Southern Corridor projects.

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 first gas will be supplied via South Stream in late 2015. The gas pipeline will reach its full capacity in 2018.

South Stream's offshore section will run under the Black Sea from the Russian coast to Bulgaria. The total length of the Black Sea section will exceed 930 kilometers and its maximum depth will be more than two kilometers.

A 1,455-kilometer onshore section will cross Bulgaria, Serbia, Hungary, Slovenia and will end in Italy. Gas branches from the main pipeline route will be built to Croatia and to Republika Srpska.

Gazprom Group is implementing the Southern Corridor GTS project in the aim of supplying additional gas to a number of Russia's central and southern regions in order to develop industrial and utility sectors, intensify gasification and ensure gas supply into South Stream.

The project covers eight Russian constituent entities, including the Nizhny Novgorod, Penza, Saratov, Volgograd and Voronezh Regions, the Republic of Mordovia and the Krasnodar Territory.

The total length of the gas transmission system will be 2,506.2 kilometers. The project stipulates building 10 compressor stations with a total capacity of 1,516 MW. The annual throughput of the Southern Corridor gas pipeline system will be 63 billion cubic meters. The project is to be delivered before late 2017.