OGZD.L Regulatory News (OGZD)

28.12.2011

Turkey grants permit for South Stream construction

Today in Moscow the Turkish party officially handed a note by the Turkish Ministry of Foreign Affairs regarding the South Stream project at a meeting between Vladimir Putin, Prime Minister of the Russian Federation and Taner Yildiz, Minister of Energy and Natural Resources of the Republic of Turkey.

All necessary and unconditional permits were granted. These permits allow for unhampered execution of the project for construction and operation of the South Stream gas pipeline running from Russia via the exclusive economic zone of Turkey.

Alexey Miller noted that the construction permit granted by Turkey was the most serious acknowledgement of the fact that the project would be executed fully on schedule, specifically before the end of 2015.

"I would like to express special gratitude to our Turkish friends for the constructive efforts and understanding, especially for prompt examination of all issues during the last days of the outgoing year. I would like to congratulate all the South Stream project participants and our partners on obtaining the construction permit. It is a very nice present for the New Year," said Alexey Miller.

Background:

With a view to diversify the natural gas export routes Gazprom is implementing the project for construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe - the South Stream project.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria in order to implement the onshore gas pipeline section.

On September 16, 2011 the South Stream Transport AG shareholders signed the Agreement for the offshore section of the project. Pursuant to the Agreement, the stakes in the offshore gas pipeline project are distributed as follows: Gazprom - 50 per cent, Italian Eni - 20 per cent, German Wintershall Holding and French EDF - 15 per cent each.

In the third quarter of 2011 the Consolidated Feasibility Study of South Stream was finalized and included the feasibility study of the offshore section and feasibility studies of the respective gas pipelines in the host countries of Southern and Central Europe.

The Consolidated Feasibility Study contains key engineering solutions of the project including their substantiation, environmental safety assessment and environmental measures, economic efficiency evaluation including capital and operational expenditures.

The Feasibility Study lays the foundation for further elaboration of project documents for the gas transmission facilities designed to supply Russian natural gas to Central and Southern Europe via the South Stream gas pipeline.