Bulgaria and Russia have reached a serious progress in the negotiations for the South Stream gas pipeline project, Russia's Gazprom CEO, Alexei Miller, said after his meeting with Bulgaria's PM Boyko Borisov.
In Miller's words, a joint company will be created in November. It will be an operator of the Bulgarian part of the pipe.
Miller also said that the technical-economical job for the building of the pipe in Bulgaria will be submitted by the end of next week.
The Bulgarian Energy Holding, which is waiting to be restructured for a year now, will be part of the joint company between Bulgaria and Russia
The Bulgarian Economy Minister, Traicho Traikov, has announced that Miller and the Bulgarian government agreed to set up a 50/50 joint venture for the construction of the Bulgarian section of South Stream.
This was negotiated in the summer during the visit of the Executive Director of Gazprom Export, Alexander Medvedev. Miller did not reveal more details fro the development of the project.
The South Stream gas transit pipeline is supposed to be ready by 2015. Its construction is expected to cost between EUR 19 B and EUR 24 B. It will be transporting 63 billion cubic meters of natural gas annually, or 35% of Russia's total annual natural gas export to Europe.
The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria's Varna; the underwater section will be long 900 km.
In Bulgaria, the pipe is supposed to split in two – one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.
The project was initiated by Gazprom and the Italian company Eni, and the French company EdF is also planned to join as a shareholder. It is seen as a competitor to the EU-sponsored project Nabucco seeking to bring non-Russian gas to Europe.
As early as April 2010, Russian Prime Minister Vladimir Putin announced that the French company EDF will also become a partner in the South Stream project. Back then he said that EDF asked for a 20% share, which, if granted, will probably leave Gazprom and Eni with 40% each.
At a recent meeting in St. Petersburg, Berlusconi and Putin welcomed the idea of having German companies join in as shareholders. There is no indication as to how the joining of RWE or some other German company would re-apportion the stakes.