Brussels, 23/06/2014 (Agence Europe) - On the sidelines of the visit of Russian President Vladimir Putin to Austrian Chancellor Werner Faymann in Vienna on Tuesday 24 June, the Austrian petroleum company OMV and the Russian gas company Gazprom signed an agreement for participation in the consortium tasked with building the Austrian section of the planned gas pipeline, South Stream. The Austrian section, which will be 50 kilometres long with an annual capacity of between 30 and 32 billion cubic metres, is expected to be up and running by early 2017.
“South Stream is supported by large energy companies. The agreement with OMV underlies our commitment to establish this new European route for gas transport. South Stream will offer additional guarantees of reliability and flexibility in supplies of Russian gas to the European markets”, Gazprom CEO Alexei Miller commented in a press release (translation). “This agreement brings our nearly 50-year-old partnership to a higher level. With South Stream, Gazprom and OMV are guaranteeing the security of supply for Europe, in particular for Austria”, added OMV boss Gerhard Roiss, stressing the role of Baumgarten as a “key gas hub in Europe”.
Against the backdrop of the Ukrainian crisis and the gas dispute between Moscow and Kiev, South Stream is the subject of a stand-off between the Commission and the Russian government, as the European executive takes the view that the project, in which Austria, Bulgaria, Croatia, Greece, Hungary, Italy and Slovenia, plus Serbia, are involved, does not comply with European legislation on the single market or competition.
In early June, the Commission opened infringement proceedings against Bulgaria, over its procedure for granting public procurement contracts as part of the work to build the section of South Stream on Bulgarian territory, calling for the work to be suspended. Other infringement proceedings against other countries involved in South Stream could follow, the Commission threatened several times in June.
On Tuesday, Miller stressed that he had “constructive dialogue” with the Commission, adding that he spoke on the telephone once a week with Energy Commissioner Günther Oettinger. “There is always some problem or other with these major projects which has to be resolved”, he told the press, referring to the stoppage of the work in Bulgaria. The future gas pipeline “is on time”, he added. Roiss stressed the importance of the South Stream project. “Europe has no alternative to importing gas from Russia. It must be clear for us that Europe needs Russian gas”, he said.
South Stream, which is headed up by Gazprom, with the involvement of the Italian energy company ENI and EDF of France, aims to connect Russia to Bulgaria under the Black Sea, bypassing Ukraine, to serve the European market via two branches: the first, to the south, to Italy via Greece; the second, to the north, to Austria, Croatia and Slovenia, via Serbia and Hungary. (EH)