Gazprom in $11.6-billion European pipeline deal with ENI, others

Gazprom, Russia's oil and gas behemoth on Friday signed deals with Italian, Greek, Bulgarian and Serbian energy majors to advance the construction of the much-hyped 3000 km South Stream gas pipeline, which will serve as an alternate supply route to the existing pipeline network through Ukraine.

The agreements were signed in the presence of the Russian prime minister Vladimir Putin and the Italian premier Silvio Berlusconi, in Russia's southern coastal resort of Sochi.

Gazprom CEO Alexei Miller told the estimated cost of the project is over €8.6 billion ($11.6 billion), stressing that there is no doubt that the project is financially viable, and he does not anticipate any problem with the funding for  the project.

A new additional agreement to the memorandum of understanding was signed between the key partners Gazprom and Italy's ENI on the future steps to be taken for the realisation of the project. It was agreed to enhance the gas pipeline's capacity from the earlier planned 31 billion cubic meters per annum to 63 billion.

Russian prime minister Putin said the agreements signed yesterday contributed to Europe's energy security.

Italian prime minister Berlusconi reiterated: "Under the circumstances, a major step toward boosting energy security was made."