Initial deal for Russian gas pipeline approved

Greece inked a preliminary agreement with Russia Friday for the construction of a natural gas pipeline, whose construction is due to begin next year.

The memorandum of understanding, signed by Energy Minister Panayiotis Lafazanis, concerns the continuation of the Turkish Stream pipeline, to carry natural gas from the Black Sea to Western Europe. Russia’s VEB development bank will own 50 percent of the 2-billion-euro link and provide all financing, while Greece will own the rest, said Russian Energy Minister Alexander Novak.

“The pipeline is not against anyone in Europe or the world,” Lafazanis said. “It is here to serve people, peace and stability. Energy can bring people together and not feed cold war situations.”

That Greek section of the pipeline will have an annual capacity of 47 billion cubic meters, with construction starting in 2016 and completion set for 2019, said Novak.

Russian state-owned gas producer Gazprom, which will not own any part of the Greek pipeline, plans to split Turkish Stream into four lines with a total capacity of 63 billion cubic meters a year.

The Greek delegation included Prime Minister Alexis Tsipras, who held talks with Russian President Vladimir Putin. The Russian leader’s spokesman, Dmitry Peskov, said ahead of the talks that Russia would consider a loan if the Greek government asked for one, but following talks between Putin and Tsipras Friday evening he said such a possibility “wasn’t discussed.”