OMV, Gazprom Ink Deal on Austrian Section of South Stream
OMV and Gazprom are looking to work together to construct the Austrian section of the South Stream gas pipeline between the Austrian-Hungarian border and Baumgarten. Feasibility study scheduled to be completed by the end of 2010.
South Stream together with Nabucco will further strengthen Baumgarten's position as a natural gas turntable and increase the security of Europe's supply.
OMV and Gazprom today signed a Cooperation Agreement to construct the Austrian section of the South Stream gas pipeline between the Austrian-Hungarian border and the Baumgarten natural gas distribution node. At the same time, the Austrian Federal Minister Reinhold Mitterlehner and the Minister of Energy of the Russian Federation Sergey Shamtko signed an agreement on cooperation between the two nations in the construction and operation of this gas pipeline on Austrian territory.
The South Stream gas pipeline is to run from the eastern Black Sea coast in Russia across the Black Sea to Bulgaria. From there one route option is assumed to pass through Serbia and Hungary to Austria, where it will flow into the Baumgarten natural gas distribution node. Other route options are to run from Hungary to Slovenia and on to Italy, and from Bulgaria through Greece and also on to Italy. Thanks to the resultant diversification of supply routes, the South Stream gas pipeline will make a major contribution to the security of Europe's natural gas supply.
The feasibility study for the Austrian subsection of South Stream is scheduled to be completed by the end of 2010. The precise route will be determined and the costs of the project evaluated. The final investment decision is set to be taken within 18 months, with the pipeline currently due to become operational at the end of 2015.
"The planned South Stream and Nabucco gas pipelines will further increase the significance of OMV's Baumgarten distribution node as a key European natural gas turntable and boost the security of Europe's supply. As for the Central European Gas Hub, already one of the most important gas trading platforms in continental Europe, this additional liquidity at its main trading point will also provide strong momentum and clear support as it seeks to become the leading gas hub in continental Europe," said Werner Auli, Member of OMV’s Executive Board responsible for Gas & Power.
Alongside the agreement between OMV Gas & Power and Gazprom, the Austrian Federal Minister Reinhold Mitterlehner and Minister of Energy of the Russian Federation Sergey Shamtko today signed an agreement on cooperation between Austria and Russia in the construction and operation of the Austrian section of South Stream. This agreement gives the project the necessary political backing and the required legal certainty, thereby making it easier to obtain financing for the project from the private sector.
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