Greece signs up for South Stream

10.06.2010 14:07

Russia's Gazprom and Greek natural gas operator DESFA signed a deal on June 7 to build the €1 billion ($1.19 billion) Greek section of the South Stream gas pipeline.

The companies agreed to establish a 50/50 joint venture to build the Greek part of the 900 kilometre long pipeline which will ship up to 63 billion cubic metres of gas per year from Russia to countries of south and central Europe.

"In the near future, a formal procedure for registration of the joint venture will start in Greece. The scope of the company will include engineering, funding, construction and operation of the pipeline on the territory of Greece," the companies said in a statement.

The offshore part, operated by Gazprom and Italy's Eni, will run from Russia's mainland under the Black Sea to the Bulgarian coast.

The plan for the onshore section outside Russia has already been signed by Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria.

South Stream was designed to bypass Ukraine in transporting Russian gas to western Europe. It is a rival to the European Union-backed Nabucco pipeline to bring gas from central Asia and the Middle East.

Greece joined the South Stream project in 2008 as part of efforts to increase domestic use of natural gas and become a transit country for the commodity.

Source : Upstreamonline