OREANDA-NEWS. February 17, 2011. Rome hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Paolo Scaroni, Chief Executive Officer of Eni.

The parties addressed the prospects for bilateral cooperation and the current status of joint projects. Special attention was paid to the South Stream project implementation. In particular, the meeting addressed the progress with preparing a feasibility study for the offshore pipeline section as well as feasibility studies for the national onshore sections in Southern and Central Europe.

Alexey Miller and Paolo Scaroni agreed to sign a contract before February 28 between Gazprom and SeverEnergia on the purchase of gas produced in the licensed areas of the latter.
Background

Italy is one of the key Russian gas importers in Europe. Gazprom and Eni have been business partners for many years.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market starting from 2007. The supply volumes peaked at 3 billion cubic meters a year by 2010. Under the Agreement the existing contracts for Russian gas supply to Italy are extended until 2035.

On June 23, 2007 Gazprom and Eni signed the Memorandum of Understanding on the South Stream project execution. The Memorandum specifies the areas of cooperation between the two companies in designing, financing, constructing and managing South Stream.

On May 15, 2009 Gazprom and Eni signed the second Addendum to the Memorandum of Understanding on the South Stream project implementation stipulating an increase in the annual capacity of the offshore pipeline section from 31 to 63 billion cubic meters and regulating gas marketing issues within the project.

On January 18, 2008 the special-purpose company South Stream AG was registered in Switzerland. The founders of the company, on a parity basis, are Gazprom and Eni.

On June 19, 2010 Gazprom, Eni and EDF signed the trilateral Memorandum providing for specific steps towards the French company’s entry in the shareholding structure of South Stream AG.

Yamal razvitiye (owned by Gazprom neft and NOVATEK on a parity basis) holds a 51 per cent stake in SeverEnergia with the rest 49 per cent owned by Arctic Russia B.V., a joint venture of Italian Eni (60 per cent) and Enel (40 per cent). SeverEnergia fully owns Arcticgaz, Urengoil Inc. and Neftegaztekhnologia. The companies hold subsurface licenses for oil and gas fields in the Yamal-Nenets Autonomous Okrug: the Samburgsky, Yevo-Yakhinsky, Yaro-Yakhinsky and Severo-Chaselsky blocks. Their ABC1 + 50% C2 reserves amount to 919 billion cubic meters of gas, 330 million tons of oil and 109 million tons of condensate.