OREANDA-NEWS. March 26, 2008.  The Gazprom Headquarters today hosted a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Paolo Scaroni, Chief Executive Officer of ENI.

The parties addressed the prospects for deeper cooperation in the oil and gas sector, highlighting the significant progress in the talks over assets swap.

Alexey Miller and Paolo Scaroni reviewed the state of preparation of the South Stream project for execution and appreciated the progress in interaction between the companies. The decision was also taken to hold a joint presentation of the project in Brussels.

In addition, the parties discussed possible areas of cooperation between Gazprom Neft and ENI.

Reference:

In November 2006, Gazprom and ENI signed the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market in 2007. Annual gas volumes will be gradually increased to 3 bcm by 2010. Under the Agreement, the existing contracts for Russian gas supply to Italy are extended till 2035.

On April 4, 2007, as part of the Strategic Partnership Agreement, Gazprom entered with ENI and Enel into a Call Option Agreement to acquire assets included in lot 2 of the auction for YUKOS property.

The auction resulted in EniNeftegaz’s (consortium between ENI (60 per cent) and Enel (40 per cent)) purchasing the following assets: Arcticgaz (100 per cent), Urengoil (100 per cent), Neftegaztekhnologiya (100 per cent), Gazprom Neft (20 per cent).

On June 23, 2007, Gazprom and ENI signed the Memorandum of Understanding for the South Stream project execution.

The MoU sets the cooperation directions for both companies in the South Stream engineering, financing, construction and management sectors.

According to the MoU, South Stream’s offshore section will run across the Black Sea from the Russian to the Bulgarian coast. The total length of the offshore section will be around 900 km, with the maximum depth exceeding 2,000 m and full capacity averaging 30 bcm. The section is planned for commissioning in 2013.

A number of various routes crossing the territory of the EU member countries are under review for the construction of South Stream’s onshore section. When implementing the project, Gazprom and ENI will apply state-of-the-art technologies meeting with the strictest environmental requirements.

On January 18, 2008, the South Stream AG Special Purpose Entity was registered in Switzerland. The venture was established by Gazprom and ENI on a parity basis.