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South Stream to Be Constructed Despite Russia-West Stand-Off – Austrian Energy Group

RIA Novosti | August 10, 2014

MOSCOW — The current stand-off between Russia and the West over the situation in Ukraine will not affect the scheduled construction of South Stream gas pipeline, the Financial Times reported Sunday quoting the head of the Austrian energy group OMV.

“Nobody can tell you not to build a pipeline. It’s a matter of national law… Everybody can decide for themselves. A pipeline is a 50-year project, so one should look at things realistically… A few months is not an issue,” Gerhard Roiss was quoted as saying.

He added that possible EU sanctions against Russia targeting the country’s gas industry would be an unwise decision.

“We have had integration in the area of gas with Russia for 45 years. Customers rely on getting their gas delivered. For that reason I don’t see any room for sanctions on gas,” the OMV chief elaborated.

Roiss also stressed that Russia is already delivering gas via the Opal pipeline with an annual capacity of 36 billion cubic meters even though Russia’s Gazprom had not secured an EU approval to run the pipeline at full capacity. Opal passes through Germany connecting the new trans-Baltic North Stream pipeline with gas transmission networks in Western and Central Europe.

Ross also insisted that an increase in the number of supply routes to Europe will benefit energy security.

“Four pipelines are better than three, and five are better than four. That is the pragmatic view,” he said.

Gazprom is constructing the South Stream pipeline across the Black Sea to Southern and Central European countries with aiming to diversify export routes for Russian gas. The construction started in late 2012, with the first deliveries expected in 2016. The pipeline is expected to become fully operational in 2018.

The European Commission is trying to hamper the project saying it violates the EU Third Energy Package banning the companies involved in gas production from owning long-distance pipelines in the region.

On June 24, Gazprom and OMV signed a shareholder pact of the joint venture South Stream Austria, defining the principles of construction and further operation of the respective gas pipeline on the Austrian territory.

August 11, 2014 - Posted by | Economics | , ,

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