Black Sea Pipe Seen At $20Bln

ria-novostiGazprom's Alexei Miller with SerbiaGaz acting chief Sasha Ilic after a South Stream signing ceremony in February.
The Energy Ministry has put the preliminary cost of the planned South Stream gas pipeline, a major new route to southern Europe, at $20 billion, a ministry spokeswoman said Wednesday.

The route, which will be jointly built by Gazprom and Italy's ENI, is expected to take 30 billion cubic meters of gas per year and rival the Nabucco pipeline, backed by the United States and European Union, to southern Europe.

The ministry spokeswoman quoted Energy Minister Sergei Shmatko as saying the project could cost $20 billion at his meeting with Italy's minister for economic development, Claudio Scajola, earlier this week in Moscow.

Eni's CEO Paolo Scaroni said last year that South Stream might cost at least 10 billion euros ($15.73 billion).

"[The $20 billion figure] is one of the preliminary estimates we have, based on a preliminary feasibility study. The cost is likely to be changed in future," the spokeswoman said.

A Gazprom spokesman declined to comment and said the company would issue a final estimate of South Stream's cost after its feasibility study is concluded by the end of next year.

The pipeline, which is expected to be commissioned in 2013, is to travel 900 kilometers under the Black Sea to Bulgaria and then split into two onshore routes -- to Italy and Central Europe.

Russia has agreed to route the pipeline through Bulgaria, Serbia, Hungary and Greece. Gazprom is also in talks with Slovenia to join.

n Gazprom increased gas exports to 109.6 billion cubic meters in the first half of this year, up 17.7 percent year on year, official data showed Wednesday. The Economic Development Ministry said that included 89 bcm to non-CIS countries, a 22.9 percent rise year on year.