EU and Russia Will Find a Solution for South Stream to the Third Energy Package, Says Russian Deputy Minister of Energy

   EU and Russia Will Find a Solution for South Stream to the Third Energy
               Package, Says Russian Deputy Minister of Energy

  PR Newswire

  MILAN, September 27, 2013

MILAN, September 27, 2013 /PRNewswire/ --

In Milan ,  the leaders of South Stream and Gazprom make their case of the
pipeline's value for Europe

Security of supply, diversification of energy sources and a strong partnership
between the energy enterprises of Europe: these were the questions addressed
at "South Stream: The Evolution of a Pipeline", a conference held today in
Milan, where leaders of South Stream and Gazprom, along with governmental
partners and sector stakeholders, analysed the social, environmental and
economic impacts of the South Stream pipeline. The audience heard about the
current state of development, with a particular focus on the offshore section
in the Black Sea.

"Since 2012, the Russian Federation has provided the countries of the European
Union with 160 million tonnes of oil and 125.5 billion cubic metres of natural
gas," Russia's Deputy Minister of Energy, Anatoly Yanovsky told the
conference. He added that negotiations between the EU and Russia will ensure a
solution to the problems raised by the Third Energy Package, which has been
seen as a roadblock to the commencement of construction.

"The European Union and Russia are very important partners in the field of
energy. Russia, and in particular, Gazprom, is the foremost supplier of energy
to Italy and next year we will celebrate 40 years of energy provision and
commercial relationships between Gazprom and Eni. The South Stream pipeline
represents a long term solution to ensuring a secure energy supply to all
European citizens, thanks to the direct connection between customers and the
most important gas reserves in the world, in Russia," said the Deputy
Minister.

"Gas is an environmentally sound source of energy, and the construction of the
pipeline will guarantee stimulate the European market as a whole, providing
energy diversification and attracting new investments in Italy, as well as
creating thousands of jobs. Eni and Gazprom were the first partners to sign
the agreements that were the basis of the South Stream project in 2007," Mr
Yanovsky added, addressing a predominantly Italian audience.

Russia is the most important commercial energy partner for Europe and has
always represented a sure, stable supply of gas for many European countries.
Analysts predict that the gas demand will increase from 312 billion cubic
metres to 537 billion cubic metres over the next fifteen years.

"Natural gas today represents the most important source of energy in the
European Union" explained Alexander Syromyatin, Deputy Head of Project
Management Department, Gazprom. "Demand in the near future will quickly
overtake supply, because of the falling extraction capacity in Europe. The
South Stream project will solve the problem of this deficit for the future."

The pipeline will be 2385 km long and will involve the partnership of 9
countries, including Bulgaria, Serbia, Hungary, Italy and Russia, and has
required substantial agreements between governments and major energy
enterprises. The total investment required will be €17 billion, and will
provide a total annual capacity of 63 million cubic metres of gas.

"The South Stream pipeline will reach full capacity at the end of 2017", said
Oleg Aksyutin, Member of the Management Committee, Gazprom, and CEO of South
Stream Transport B.V. "Half of this capacity is for Italy. The offshore
section of the pipeline will be 30% financed by the partnership between
Gazprom, Eni, EDF, and Wintershall and 70 % will be raised by the market. It
will satisfy the electricity needs for 38 million homes in Europe."

Minister Yanovsky's statements highlighted the importance that Russia places
on its energy partnership with Europe, as South Stream will not only diversify
and guarantee stable gas supply routes to the EU, but also decrease transit
risk.

Gianni Pitella, Vice President of the European Parliament, said, "The primary
goal of European legislation must be to maintain access to energy supplies, in
particular for consumers and family-run small businesses. That requires the
guarantee of an efficient service and low costs. We can reach these goals only
by making stronger the infrastructure of the internal market and diversifying
the energy sources. This is the reason why the South Stream project represents
an important solution to the growing need for gas in Europe."

Presenting points of view from South Stream's partner countries was Reka
Szemerkenyi, Advisor to Hungarian Prime Minister and Dragutin Matanovic,
Advisor to the Serbian Prime Minister.

Szemerkenyi said that that prepokarations for construction in Hungary were
well advanced, but that a co-ordinated approach between all participant
countries was required to navigate legislation at the European level.

She said, "Hungary has come a long way in working towards the preparation in
order for South Stream to begin construction. All pre-construction engineering
aspects in the pre -construction phase are ready for work to begin and with
the work done so far, the deadlines set can be met. However, in the last
couple of months all the Intergovernmental Agreements of the South Stream
participant countries have come under criticism from the European Union on the
Third Energy Package. Therefore, we now have to work together with
participation from Russia, the EU and the country participants to ensure South
Stream goes ahead as planned."

This event is the third in a series organised by Natural Gas Europe, a leading
independent source of insight on natural gas developments in European gas
markets, after conferences in Sofia and Belgrade, with conferences taking
place in the coming months in Ljubljana, Budapest and Brussels. 

Note to Editors: Natural Gas Europe provides essential daily reading on
European gas matters.

As an independent organization, Natural Gas Europe providesinformation and
analyses of natural gas matters from correspondents, contributors and media
partners.

Natural Gas Europe 's focus is on the role of natural gas in
Europe,facilitating dialogue and understanding of important matters such as
exploration, environment, regulation and energy security.

Contact: Contact: Rick Gill, +447771555201 (hrgill@minoils.com)