VIENNA--Russian state gas giant OAO Gazprom and Austrian oil and
gas company OMV AG signed an agreement Tuesday on the construction
of the last 50 kilometers of the planned South Stream gas
pipeline.
The signing comes the same day as Russian President Vladimir
Putin is visiting Austria.
The South Stream pipeline is intended to bring Black Sea gas via
Bulgaria to Europe, ending at the Baumgarten gas hub in Austria.
The pipeline would by-pass Ukraine.
As the crisis in Ukraine continues, there has been growing
European Union resistance to South Stream in recent months. Earlier
this month, Bulgaria, seen as a supporter of the pipeline, stopped
construction on the pipeline amid EU competition concerns.
Although the European Commission said last March that all high
level political talks regarding South Stream would be put on ice,
Gazprom's Chief Executive Officer Alexei Miller said, via a
translator, that he was in "constructive dialogue" with the EU
Commission. He added that he had at least weekly, sometimes daily
phone contact with EU Energy Commissioner Guenther Oettinger.
"Big projects always have a question or another than need to be
solved," Mr. Miller said, in response to a question about the
construction stop in Bulgaria.
The pipeline is completely "on schedule," Mr. Miller, said with
the first gas deliveries planned for the beginning of 2017 and for
the gas deliveries to reach their maximum by the end of 2017.
OMV's CEO Gerhard Roiss said there is no alternative for Europe
than to import gas from Russia.
"It must be clear to us that Europe needs Russian gas," Mr.
Roiss said.
Gazprom said in a statement that the two sides expect to obtain
all required permissions for the South Stream construction by the
end of 2015. The pipeline is designed to carry 30 billion to 32
billion cubic meters of gas a year from the Austrian border with
Hungary to Baumgarten, 50 kilometers away.
-Andrey Ostroukh in Moscow contributed to this article
Write to Nicole Lundeen at nicole.lundee@wsj.com
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