Gazprom, OMV to sign shareholder agreement on South Stream Austria JV on June 24

Gazprom and Austrian OMV will sign the shareholder agreement on the South Stream Austria project company during President Vladimir Putin's visit to Austria on June 24, presidential aide Yury Ushakov told journalists.

Gazprom and Austrian OMV will sign the shareholder agreement on the South Stream Austria project company during President Vladimir Putin's visit to Austria on June 24, presidential aide Yury Ushakov told journalists.

Gazprom CEO Alexei Miller will sign the agreement with his counterpart at OMV, Gerhard Roiss

"This agreement follows up on the memorandum on implementation of the South Stream project in Austria, which was signed on April 29," he said.

"This document regulates the range of issues associated with the activities of the joint company, defines its structure, the structure of management, and the specific rights and obligations of the participants; it lays out the principles for financing and distribution of earnings among the shareholders," Ushakov said.

Asked how the South Stream situation in Bulgaria might affect the development of the project in Austria, Ushakov said: "We have received no signals from the Austrians in the runup to our visit. The issue will of course be discussed. It is a very important topic."

Source: Natalya Mikhaylenko

Initially, the Baumgarten hub in Austria was to have been the terminus of the South Stream pipeline, and Russia and Austria signed an intergovernmental agreement to that effect in 2010. It was at that time that South Stream Austria GmbH was formed. However, after Austria shifted its focus to the alternative Nabucco pipeline project, it was decided to re-route South Stream to northern Italy through Slovenia. But Nabucco subsequently lost out in the competition for Azerbaijani gas to yet another pipeline project, Trans-Adriatic Pipeline (TAP).

Meanwhile, routing South Stream to Italy through Slovenia was found to pose unacceptable risks. It would shift the acceptance point to Ratece instead of Tarvisio, which could trigger pipeline contract reviews. In addition, regulatory hurdles meant construction of the pipeline segment in Italy from Ratece would take a long time, potentially jeopardizing the entire project.

Read more: Alternative South Stream route could run through Crimea

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