ENI group suggests South Stream construction on Romanian soil

The Italian energy group ENI has had enough waiting for Serbia to decide whether it is worth or not to ratify a gas and oil agreement with Russia. The Serbian-Russian agreement would imply the takeover of Naftna Industrija Srbije (NIS – the national oil and natural gas operator) and the construction of the South Steam gas pipeline. Sources in the Serbian Energy Ministry declared for RBK Daily that ENI started to lobby in favor of a pipeline track crossing Romania instead of Serbia, in which case authorities in Belgrade would lose transit taxes worth some 130 million euro per year.

With a capacity of 30 billion cubic meters of gas per year, South Stream is designed to start in Russia, in the Krasnodar region, crossing the Black Sea up to the Bulgarian harbor of Varna, then splitting in two directions: towards Italy and towards the Central Europe. Gazprom partners with ENI in the construction of this 20 billion euro project.

According to sources in the Serbian Energy and Mining Ministry, ENI suggests a come back to the initial plan: to build the pipeline through Romania and to avoid Serbia. Gazprom refused to comment on the information.

Analyst Dmitri Liutighin, working with the Veles Kapital consultancy company, believes that Gazprom will defend the Serbia option, because it needs NIS to accomplish its strategy.

Moving the pipeline through Romania would not influence the total cost of the project.