Brussels, 30/04/2014 (Agence Europe) - On Tuesday 29 April, the Austrian energy company OMV and the Russian gas company Gazprom signed a memorandum of understanding on the implementation of the Austrian section of the gas pipeline South Stream. Against the current tense backdrop of a gas dispute between Russia and Ukraine hanging over the EU, this move will allow Gazprom to shore up its position in Austria, a country which the Russian gas giant has been supplying for more than 40 years.
This memorandum of understanding lays down the parties' intention to construct the Austrian section of Gazprom, which will link Bulgaria, under the Black Sea, to Baumgarten in eastern Austria, crossing Serbia and Hungary. Its maximum capacity will be 32 billion m3 a year. The parties hope to secure all the permits required for the construction work by the end of 2015, with a view to the first deliveries of gas in 2017, with the Austrian section to be fully up and running in January 2018.
“The need for construction and the benefits of the South Stream Project for Europe are obvious. The South Stream Project is aimed at enhancing the energy security of European consumers, which has always been regarded as the top priority for Gazprom. It is noteworthy that Gazprom and OMV have already established a solid basis in international law for the implementation of this project - an intergovernmental agreement between Russia and Austria signed in April 2010”, the chief executive of the Russian gas company, Alexei Miller, commented in a press release.
“This is an important step to significantly increase Austria's gas supply security and will further strengthen Baumgarten's role as key hub for gas in Central and Eastern Europe. Our [long] partnership with Gazprom has contributed to this successful step in further diversifying Europe's energy supply routes”, added the OMV chief executive, Gerhard Roiss. The agreement also has the blessing of Austrian Economy Minister Reinhold Mitterlehner, added Gazprom.
South Stream, which is managed by Gazprom and the Italian energy company ENI, will connect Russia to Bulgaria under the Black Sea to supply the European market by two branches - a southern one which ends up in Italy and a northern one going to Austria. Both of these routes avoid Ukraine, which is the main transit country for Russian gas destined for the EU. (EH)