Greece, Russia sign memorandum on gas pipe to Greece

MOSCOW – Agence France Presse

CİHAN Photo

Russia and Greece on June 19 signed a preliminary agreement to set up a joint venture to build a pipeline through Greece, Moscow said.

“This is the start of a large investment project in Greece that is beneficial to the country’s economy,” Russian energy minister Alexander Novak said at the signing ceremony on the sidelines of the Saint Petersburg International Economic Forum, quoted by his ministry’s official Twitter account.

He estimated the total volume of supplies at 47 billion cubic meters.

The two countries will jointly own the venture, ministry spokeswoman Olga Golant told AFP.     

Russian gas giant Gazprom had earlier proposed footing the bill for building a Greek pipeline extension of the Russia-Turkish energy venture Turkish Stream, which aims to deliver gas to Europe while bypassing Ukraine.

The signing came just before Russian President Vladimir Putin was set to hold talks with Greek Prime Minister Alexis Tsipras amid a banking crisis in Greece which may see the country default on its debts.

Moscow last year axed its South Stream project for a gas pipeline to southeastern Europe after construction had already begun, as relations with the European Union reached a nadir over Russia’s role in the Ukraine conflict.

Instead Moscow announced a pipeline to Turkey, which should be ready in December 2016, and told European nations they would need to build links to get the gas.

Separately, Gazprom agreed June 18 a plan with Shell, E.ON and OMV aimed at building a new gas pipeline to Germany, the companies said in a statement.  

In the memorandum of understanding, Germany’s E.ON, Austria’s OMV and Anglo-Dutch Shell would join up to construct the new route under the Baltic Sea from Russia with a capacity of 55 billion cubic meters per year, the statement said.

The project, for which no timeframe was given, would double the capacity of the existing Nord Stream pipeline currently linking the two countries.

The announcement comes as Russia seeks more routes to deliver its gas to the European Union avoiding crisis-hit Ukraine, despite the 28-nation bloc insisting it wants to cut its dependence on Russia.

Gazprom CEO Alexei Miller said that the new pipeline would help “contribute to enhancement of safety and reliability of gas supplies” to European markets after the agreement was signed on the sidelines of Russia’s showcase investment forum in Saint Petersburg.  

“New projects are important for satisfying energy demand, particularly as Europe’s domestic production of natural gas declines,” Ben van Beurden, CEO of Shell, said in the statement.