Gazprom Said to Pick Italy Over Austria as South Stream End

OAO Gazprom (GAZP), the world’s biggest natural-gas producer, has decided to end its South Stream pipeline in Italy rather than Austria, according to a company official.

South Stream, which may cost about 15.5 billion euros ($20 billion), will run 900 kilometers (560 miles) under the Black Sea to the Balkans, where it was supposed to split into northern and southern routes, with the link’s northern arm finishing at OMV AG (OMV)’s Baumgarten hub in Austria.

Gazprom’s decision to have the pipe finish in Italy means that the northern route now is obsolete, said the person, who declined to be identified by name.

OMV spokesman Sven Pusswald said that the company was a partner for the 60 kilometers of the pipe planned for Austria. “We’ve completed the feasibility study for that section” and “are waiting for Gazprom to present the study for the entire pipeline,” he said. Gazprom declined to comment.

Gazprom’s plans were reported by Reuters earlier today.

To contact the reporter on this story: Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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