South Stream will cost Gazprom more than expected
The real expenses of Gazprom into the construction of the South Stream pipeline can reach $65 billion, not Euro 30 billion as it valued before, Reuters reports referring to the president of East European Gas Analysis, M. Korchemkin. He takes into account expenses into the construction of the pipeline from Yamal to Middle Russia ‘Bovanenkovo – Ukhta – Pochinki’ that is not concerned by Gazprom. In his opinion, it will be extremely hard for the company to recoup such an investment with the current hydrocarbons price. He thinks that for acceptable investment recoupment, Gazprom should sell gas to Europe by over $14 per MMBtu (slightly more than 28 cubic m), and average current price is $11.8.