Gazprom Could Refuse to Build Northern South Stream Route to Austria

Russian gas giant Gazprom may refuse to build the northern leg of the South Stream gas pipeline to Austria, the company said on Friday.

"The construction of South Stream will start at the Russian coast of the Black Sea near Anapa. The pipeline will run along the seabed of the Black Sea through the Turkish economic zone and [will come out of the water] on the Bulgarian coast near Varna. Then the Russian gas will go [via pipeline] through Bulgaria, Serbia, Hungary and Slovenia to the northeastern Italian city of Tarvisio," Gazprom said in its corporate magazine.

"Legs from the main pipeline are planned to be built to Greece, Croatia, and Srpska within Bosnia and Herzegovina," the company also said.

The final decision about the pipeline route is scheduled to be made in November 2012.

The South Stream pipeline is intended to transport up to 63 billion cubic meters of natural gas to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine.

Construction will start in December 2012. Russia plans to start using the pipeline in 2015.

The pipeline's core shareholders include Gazprom with 50 percent, Italy's Eni with 20 percent and Germany’s Wintershall Holding and France's EdF with 15 percent each.

Eni head Paolo Scaroni said in April that the South Stream shareholders have agreed to build the northern leg to Austria before starting work the southern leg to Italy specifying that the question was in the competence of Gazprom and the transit countries.