Gazprom has been putting the final investment agreements in place for the South Stream project, clearing the way for construction of the 63bn cubic metres a year pipeline to Europe to begin next month. Never mind that demand for Russian gas in Europe is falling, or the $19bn cost of South Stream. The pipeline will help free Gazprom from dependence on Ukrainian transit pipelines and improve European energy security.
Gazprom and its foreign partners took a final investment decision on the 900km offshore section of South Stream at a meeting in Milan late on Wednesday. The pipeline will be laid on the bed of the Black Sea and will link southern Russia with the coast of Bulgaria.