Gazprom adds $16.9 billion to South Stream costs
BY JAMES MARSON
MOSCOW -- Gazprom said it will invest $16.9 billion expanding its pipelines to take gas to southeastern Europe via the South Stream link, piling further costs onto a project aimed at bypassing traditional transit countries Ukraine and Belarus.
The investment in Russia's domestic pipeline network, revealed in a document posted on Gazprom's website, will bring the total cost of the project aimed at shipping 63 Bcm of gas under the Black Sea by 2018 to $38.4 billion. The offshore and European sections of the pipeline are forecast to cost $21.5 billion.
Russia says South Stream is needed in order to diversify supply routes to the European Union after disputes with Ukraine led to cutoffs in 2006 and 2009. Russian gas covers around a quarter of Europe's needs. Gazprom and its South Stream partners EDF, BASF unit Wintershall and ENI launched construction of the offshore section of the pipeline in December.
Dow Jones Newswires