Gazprom Says Centrgaz Unit to Build South Stream Section in Serbia

Russian gas major Gazprom said on Tuesday its Centrgaz unit has won a tender to build the Serbian section of the South Stream gas pipeline.

The tender, launched in March, drew bidders from Russia and Serbia, Gazprom said in a statement.

Centrgaz, 99.99%-owned by Gazprom, will be in charge of the design, the supply of equipment and materials, the construction and installation works, the staff training and the commissioning of the Serbian stretch of the pipeline.

Under the contract signed on Tuesday by Centrgaz with the project company in charge of the Serbian section of the pipeline, it is obliged to subcontract Serbian companies to carry out certain activities.

In June, on the backdrop of the stand-off between the EU and Gazprom over the implementation of the project on the territory of some EU member states, news agency Itar-Tass quoted Russian foreign minister Sergey Lavrov as saying Russia and Serbia had confirmed their commitments to the construction of the gas pipeline.

Also in June, Bulgarian prime minister Plamen Oresharski said Bulgaria was halting the construction of the South Stream section on its territory until the project is aligned to EU law. The Bulgarian authorities had earlier received a letter of formal notice from the European Commission, asking the country to suspend the project's implementation as it runs counter to EU legislation.

The planned South Stream gas pipeline will carry gas from Russia to central and southern Europe via Bulgaria, Serbia, Hungary and Slovenia, reaching its full capacity of some 63 billion cubic metres (cu m) per year by 2017. The total value of the Gazprom-spearheaded project is estimated at some 16 billion euro ($21.7 billion).

Construction works on the Serbian section of the South Stream - which will ultimately have an annual capacity of 40.5 billion cu m while stretching for 422.4 kilometers - are set to start in July.

Source: SeeNews