EDF to Purchase South Stream Stake

MILAN (Dow Jones Newswires), June 18, 2010

Eni and Gazprom agreed Friday to let Electricite de France SA (EDF) enter their South Stream joint venture.

Eni and Gazprom signed a memorandum of understanding to allow EDF to buy a stake in the venture, which is building pipeline infrastructure across the Black Sea to bring gas from Russia to Europe.

"The deal also confirms the agreements on gas volumes that Gazprom will provide to Eni through the South Stream pipeline and that Eni will sell on the European markets," read a joint statement.

The statement didn't specify the size of the stake that EDF would buy, but Eni Chief Executive Paolo Scaroni has said it would be up to 20%.

The memorandum, signed by Eni and Gazprom at the St Petersburg International Economic Forum, will be sanctioned Saturday at a summit between Russian President Dimitri Medvedev and French President Nicolas Sarkozy.

The news had been expected for months.

Earlier in the day, Russian news agency Interfax reported that a deal at the summit was likely.

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