BUSINESS

New Partner for South Stream

By Stephen Bierman and Anna Shiryaevskaya

Bloomberg

Reuters Putin and Pahor watching their national teams playing a 2010 World Cup qualifying match in Moscow on Saturday.

MOSCOW — Slovenia became the latest European country to join Gazprom’s South Stream pipeline project on Saturday, signing an agreement which paves the way for Russian gas to reach European markets.

The accord followed talks between Slovenian Prime Minister Borut Pahor and his Russian counterpart Vladimir Putin in Moscow, and was signed by Russian Energy Minister Sergei Shmatko and Slovenian Economy Minister Matej Lahovnik.

Slovenia joins Bulgaria, Serbia, Hungary and Greece as a partner in the onshore section of South Stream, which is designed to boost Russian gas supplies to western markets while bypassing Ukraine. The 900-kilometer (560-mile) pipe, due to deliver gas by the end of 2015 and being built in partnership by Gazprom and Italy’s Eni SpA, will run under the Black Sea to the Balkans, where it will split into northern and southern routes.

“We have today signed the final agreement among all European partners needed for completion of this project,” said Putin at the signing ceremony in Moscow. The project will enable Russian gas to reach Italy, where Eni is headquartered.

Slovenia, which buys about 600 million cubic meters of the fuel a year from Gazprom, was among the Balkan countries affected by the gas dispute between Russia and Ukraine. The Adriatic nation now wants to avoid further disruption by diversifying energy sources.

“This agreement for us will be a very important event,” said Pahor.

The Slovenian section of the South Stream pipeline will be able to carry as much as 10 billion cubic meters a year, Lahovnik said Thursday in Ljubljana. The Russian gas-export monopoly and the Slovenian gas distributor Geoplin Plinovodi will form a joint venture to operate the pipeline with each company owning a 50 percent stake that will operate in line with European Union legislation, according to Lahovnik.

The cost of the project in Slovenia will be known in the next two years when the feasibility study is completed. Petrol Group, Slovenia’s largest energy group, may also benefit from increased gas flows through the country, according to former chief executive officer Marko Kryzanowski.

South Stream may compete with the planned Nabucco pipeline, backed by the European Union, which is designed to bring gas from the Caspian and Middle East to Austria through Turkey. It aims to start operations in 2014.

The South Stream agreement was signed hours before Russia and Slovenia met on the soccer field for their World Cup playoff.

?? Slovakia said Friday that it was upset by slow progress in its talks with Russia over new gas storage and guarantees of supply stability after suffering badly in January during a gas dispute between Moscow and Kiev, Reuters reported.

Slovakian Economy Minister Lubomir Jahnatek said his government asked Gazprom Export to prepare a document to outline anti-crisis measures but has had no response so far.

“We don’t know whether the documents are being prepared to prevent the crisis from repeating,” he told reporters after meeting Russian officials. “The second goal is to increase the security of Slovakia’s gas storage, and here we don’t have clarity either.

A standoff between Russia and Ukraine led to a halt of Russian gas supplies to Europe via Ukraine for two weeks in January, and Slovakia was among the hardest hit.

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