Gazprom resumes official talks with Austria on South Stream amid route risks
MOSCOW. Feb 24 (Interfax) - Gazprom is again holding negotiations with Austria about the country's participation in the South Stream project against the backdrop of growing risks concerning the construction of the gas pipeline directly to Italy through Slovenia.
Gazprom CEO Alexei Miller and the CEO of Austrian company OMV, Gerhard Roiss "touched on the issues of progress in the implementation of the South Stream project, as well as supplies of Russian gas to Austria" at a meeting in Sochi on Sunday, the Russian gas giant said.
The gas hub in the Austrian city of Baumgarten was initially considered as the terminus of the South Stream pipeline. Russia and Austria even signed an intergovernmental agreement in 2010 and the authorized companies formed the joint venture South Stream Austria GmbH. But after Austria focused on the alternative Nabucco project, it was decided that South Stream would go to northern Italy through Slovenia. However, the Nabucco project, backed by OMV, lost the battle for Azerbaijani gas to the alternative Trans-Adriatic Pipeline (TAP).
However, the current basic route has run into problems. It turns out that if gas will be brought into Italy through Slovenia instead of Austria it will be received at a different location - Ratece instead of Tarvisio, which will require reconsidering contracts. But a review of contracts would open up the possibility of discussing all changes, not only the delivery point, as the Russian side wants, but also prices, which is what buyers in Europe want. Then it was found that due to red tape the Italian section of pipeline from the Slovenian border would be built very slowly, which could disrupt the overall project schedule. Running the pipeline through Austria would also be a shorter route and about 800 million euros cheaper.
However, this would require a review of the project parameters in Hungary and Serbia, with all approvals having to be obtained again.
Miller also met with Srbijagas head Dusan Bajatovic in Sochi on Sunday and discussed South Stream. "The process of assessing the project's environmental impact has been successfully concluded in the republic, the process of territorial planning in accordance with national legislation is being completed," Gazprom said.
