Greece to become part of South Stream gas pipeline project

16/04/2008

An agreement expected in Moscow this month would bring Greece into a joint venture to build a 900km pipeline under the Black Sea.

(Reuters, IHT, Reporter.gr, The Moscow Times, Wiener Zeitung, Portfolio.hu, B92 - 15/4/08; New Europe, RIA Novosti, Kommersant - 14/04/08; AP, ANA-MPA - 10/04/08)

"Russia is a very big energy player, and the positive ties we currently enjoy can be only a good thing," Greek Development Minister Christos Folias said. [File]

After Bulgaria and Serbia earlier this year, Greece would become the third Balkan nation to join the South Stream pipeline, designed to transport Russian natural gas to Europe.

"We have agreed to be part of the South Stream project," Greek Development Minister Christos Folias told Reuters on Tuesday (April 15th). "We are now discussing technical details to formulate a document that we can then sign. The political will [on both sides] is … a given."

The agreement on Greece's inclusion could be signed towards the end of this month during Greek Prime Minister Costas Karamanlis's visit to Moscow.

Under the project, a joint venture of Kremlin-backed Gazprom and Italy's Eni, a 900km pipeline will run under the Black Sea, linking Russia with Bulgaria, and then fork into two branches. Serbia and Hungary, which have also agreed to join the project, would lie on the northern branch, originally planned to end in Austria.

Because of problems with Austria's OMV, Gazprom appears now to be considering rerouting that branch through Slovenia and on to northern Italy. Company CEO Alexei Miller reportedly won Slovenian President Danilo Turk and Prime Minister Janez Jansa's support last week for their country's inclusion in the South Stream project.

Greece would become a transit country on the pipeline's southern branch to Italy.

South Stream, worth 10 billion euros, is scheduled for completion in 2013. It will carry 30 billion cubic m of Russian natural gas to Europe annually.

Russia already supplies more than a quarter of the 27-nation EU's gas consumption, which has fuelled concerns about Moscow's increasing clout in the European energy market.

South Stream is viewed as a competitor to the EU's long-stalled Nabucco pipeline, which is backed by the United States. It would transport annually up to 30 billion cubic m of gas from Central Asia and the Caspian to the EU via Turkey, Bulgaria, Romania, Hungary and Austria, covering perhaps 5% of Europe's needs.

Development Minister Folias's remarks to Reuters came just days after US Deputy Assistant Secretary of State Matthew Bryza told reporters in Athens last week that he and Greek Foreign Minister Dora Bakoyannis had "talked about how important it is to put in place diversification options before deepening dependence in one direction, on a single company that's already such a major supplier ".

In his interview with Reuters, Folias sought to downplay such concerns, saying,"Russia is a very big energy player, and the positive ties we currently enjoy can be only a good thing."

Last year, Greece and Bulgaria reached a deal with Russia on the construction of a 285km pipeline meant to carry Russian oil to the Mediterranean.