Wednesday, July 2, 2014

Gazprom signs South Stream Austria shareholder agreement

Gazprom signs South Stream Austria shareholder agreement

Russia’s Gazprom and Austria’s OMV oil and gas companies on Tuesday signed an agreement on the creation of a joint-stock company, South Stream Austria, outlining the principles for the construction and exploitation of the Austrian stretch of the South Stream gas pipeline.

The agreement was signed during Russian President Vladimir Putin’s visit to Vienna.

Gazprom and OMV CEOs Alexei Miller and Gerhard Roiss put their signatures under the document.

OMV CEO Gerhard Roiss (left) and Gazprom CEO Aleksei Miller
OMV CEO Gerhard Roiss (left) and Gazprom CEO Aleksei Miller
Gazprom and OMV will own a 50 percent stake each in the joint venture.

The agreement specifies the duties and responsibilities of the shareholders as well as the funding and profit-sharing principles.

In April, the sides sealed a memorandum on the construction of South Stream in Austria with annual gas supplies to that country through the future pipeline estimated at 32 billion cubic meters. Construction permit is expected to be issued in 2015 and the first supplies were initially set for 2017. The pipeline is due to reach its full operational capacity by 2018.

However, OMV hopes that Austria may get its first gas through South Stream earlier than planned - in late 2016.

Austria's FM voices support for South Stream gas pipeline project

The pipeline with a total annual capacity of 63 billion cbm will connect the Russian port of Novorossiisk and the Bulgarian coast through the Black Sea and branch out towards Austria’s Baumgarten via Serbia and Hungary.

The agreement defines their specific rights and obligations and lays out the principles for financing and distribution of earnings among the shareholders.

The agreement signing was accompanied by approval of the final investment decision on construction of the Austrian segment of the pipeline under the previously agreed criteria, Gazprom said in a statement.


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