Construction of offshore division of South Stream can start in 2014
The operator of the offshore division of South Stream gas pipeline, South Stream Transport is going to hold in 2013 tenders for the selection of materials and contractors for construction, and the offshore pipeline construction will start in 2014.
Earlier the chief of Gazprom, A. Miller told that the symbolic start of South Stream construction will be on December 7th. The shareholders of South Stream Transport AG are Gazprom with 50%, Eni with 20%, Wintershall and EdF with 15% (each).
On November 20th, South Stream Transport published its report on the distribution of the work for estimation of impact to environment of the Russian division of the pipeline. Field testing within the estimation will be performed before Q1 2013, and consulting on its preliminary variant will be performed in Q3 2013. The final variant will be in Q4 2013. The construction of the Russian division can start only after admission by the State Expertise.
In 2013, South Stream Transport is going to hold tenders for purchase of pipes and pie layers service. Being the project partner, Eni has offered Saipem as a pipe layer. They hope to get all the necessary permits by 2014 in order to start construction.
The company is sure it will succeed in attraction of the necessary financing. Now its financial consultants are ING Bank, Credit Agricole and The Russian Project Finance Bank. Borrowed funds can share up to 70%, and own funds of the shareholders can be 30%.
Total cost of the offshore division construction can be defined in 2013 after execution of the tenders. In Gazprom estimation, total price of South Stream gas pipeline is Euro 16 billion, including $10 billion to offshore division. They are going to build 4 branches with capacity of 15.75 billion cubic m of gas each. Commercial supplies will start in Q1 2016, and the project will achieve full capacity of 63 billion cubic m in 2018.
Translated by Nadezhda Poltoratskaya
