Italian company Eni and Russia’s Gazprom have signed a memorandum allowing the French EDF to join as a third shareholder in the South Stream gas transit pipeline.

According to the document, EDF “will acquire a share in the Italian-Russian consortium established for creating infrastructure through the Black Sea for transporting natural gas to Europe,” Eni and Gazprom announced in a joint communique.

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 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.

The first deliveries through the South Stream pipe are planned for 2015; the pipeline will have a total transit capacity of 63 billion cubic meters of natural gas per year.

For the realization of the project, Russia has already signed bilateral agreements with Bulgaria, Serbia, Hungary, Greece, Austria, and Slovenia.

After the start of Gazprom-Romania talks for the inclusion of the latter in the project, recent reports have claimed that Romania might replace Bulgaria as the project’s Balkan hub as the Bulgarian government has become increasingly cautious over large-scale Russian energy projects.

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