OREANDA-NEWS.   Alexey Miller, Chairman of Gazprom's Management Committee and Gerhard Roiss, Chief Executive Officer of OMV inked a Shareholders Agreement for the South Stream Austria joint project company. The document was signed in Vienna today during a visit by Russian President Vladimir Putin to the Republic of Austria.

The Agreement envisages the parties' cooperation while constructing the Austrian section of the South Stream gas pipeline with the annual capacity of 30 to 32 billion cubic meters running from the Hungarian border to the end point in Baumgarten. The signed Agreement includes the final investment decision based on approved criteria for the pipeline construction in Austria, as well as Action Plan over 2014 to 2016. Parties expect all the construction permits to be obtained until late 2015. South Stream in Austria is scheduled for commissioning in late 2016.

“South Stream is supported by major European energy companies. The Agreement with OMV represents an important step in constructing a new trans-European gas transmission route. South Stream will offer additional guarantees of reliability and flexibility of Russian gas supplies to European markets already next year,” said Alexey Miller.

“Today's agreement advances the partnership, which has lasted for about 50 years to the next level. Within the South Stream project, Gazprom and OMV are safeguarding the security of supplies for Europe and, particularly, for Austria. This contract also cements the role of Baumgarten as a key European gas hub,” said Gerhard Roiss.

Background

South Stream is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. First gas via South Stream will be supplied in late 2015. The gas pipeline will reach its full capacity in 2018.
In 2010 the intergovernmental agreement was signed for the implementation of the project in Austria. In 2011 Gazprom and OMV established the South Stream Austria joint project company on a parity basis for the construction of South Stream in Austria.
On April 29, 2014 Gazprom and OMV signed the Memorandum of Understanding with the intention to construct the Austrian section of South Stream with an annual capacity of up to 32 billion cubic meters and the end point in Baumgarten.
OMV is Gazprom's main business partner in Austria. Since 1968 more than 190 billion cubic meters of Russian natural gas have been delivered to Austria, with 5.2 billion cubic meters supplied in 2013.