The Bulgarian and Russian governments have formally agreed to set up the South Stream pipeline joint venture by November 15, according to information from the Russian cabinet.
This was agreed during a phone conversation between the two countries PMs, Boyko Borisov and Vladimir Putin. Borisov and Putin expressed satisfaction at the way the joint work on South Stream is progressing.
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 900 km long.
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.
The ownership of the Russian-Bulgarian joint company to build and manage the Bulgarian South Stream section will be split 50-50%.