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Oil & Gas

Russia wins approval for gas pipeline to EU

November 16, 2009
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Reuters reports Russian Prime Minister Vladimir Putin has won Slovenia approval for the South Stream pipeline, undermining European Union efforts to reduce dependency on Russian gas supplies. The seal of approval is the latest victory for the Kremlin as it seeks to counter the long delayed Nabucco pipeline, which is backed by the European Union as a way to curb dependency on Russia by pumping gas from the Caspian and the Middle East. Slovenia''s approval brings the South Stream pipeline a step closer to being built by Russia’s Gazprom and Italy''s Eni SpA. The two still have to raise billions of dollars to finance the project. Slovenia is the fifth country to sign such an agreement with Russia on the South Sea pipeline, which will skirt Ukraine and cross Bulgaria, Serbia, Hungary, Greece, Slovenia to Italy. With a capacity of 63 billion cubic meters a year, the pipeline is expected to cost between 19 billion and 24 billion euros and should become operational in 2015. Russia has been trying to persuade major European powers that support for alternative supply routes will ensure smooth supplies, bypassing Ukraine. Putin, who said Russia will cut gas deliveries to Europe again this year if Ukraine siphons off transit supplies crossing its territory, will travel to Ukraine to discuss energy with his Ukrainian counterpart Yulia Tymoshenko.
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