Gazprom and Krasnodar Territory sign agreement on cooperation in South Stream project

Gazprom and the administration of Krasnodar Territory have signed an
agreement on cooperation in realizing the South Stream project for
2010-2014, a message freom Gazprom says, RIA Novosti reports.

On Tuesday Moscow held a meeting of the head of Gazprom’s management,
Alexei Miller, and the Governor of Krasnodar Territory, Alexander
Tkachov. The sides paid special attention to spreading gas services in
the region. They proposed adding Tuapsin to the gas service program.
Miller and Tkachov discussed realization of investment projects of
Gazprom in the territory.

The agreement involves construction of a unique compression station to
provide transport of gas over a 900 km distance along the sea section
of the gas pipeline.

The administration of the Krasnodar Territory will assist Gazprom in
obtaining the necessary documents, expertise and approval of each
construction stage.

Gazprom will consider opportunities for providing additional gas
supplies for Krasnodar and the south-west regions (the Anapa,
Novorossiysk, Gelendzhik, Abin, Crimean and Temruk regions) via
reconstruction and construction of new facilities of the single gas
supply system of the region.

The agreement between Gazprom and the administration of Krasnodar
Territory was signed in February 2004. In 2002-2009 Gazprom invested
approximately 5 billion rubles into the gas network of Krasnodar
Territory. In this period the level of gas suply rose by 14.5%
reaching 77.5%, comprising 83.9% in cities and 69.5% in rural areas.
The average Russian indicators are 63.2%, 67.5% and 45.5%
correspondingly.

The South Stream project is being realized to diversify natural gas
supply routes for European consumers and involves construction of a
pipeline underneath the Black Sea to Southern and Central Europe.
Capacity is expected to reach 63 billion cubic meters of gas annually.
The sea section of the pipeline will connect the ‘Russkaya’
compression station to Bulgaria. It will be 900 km long.

Realization of the land section of the project abroad with Bulgaria,
Serbia, Hungary, Greece, Slovenia, Croatia and Austria required
inter-governmental agreements to be signed.

The technical and economic basis of the project will be ready in
February 2011. The gas pipeline will be launched in December 2015. In
November, Miller said that the gas pipeline may be launched 4 months
ahead of December 31, 2015.