ECONOMY

Gas deal terms pending

MOSCOW – Russia and Greece took the first step toward the realization of the transit of natural gas via the South Stream pipeline from this country with the signing of an agreement in Moscow last week. But the agreement raises several questions of a technical nature. The only thing we know about the pipeline so far is that it will begin at the port of Novorossiysk on the eastern shore of the Black Sea and be laid underwater to the Bulgarian port of Burgas on that country’s western Black Sea shore. From there, it will probably be split into two routes. The northern branch will go on to Serbia and Hungary, with possible further extensions toward Austria and Slovenia. The southern branch will evidently come to Greece but we do not yet know the point of entry, from where it will continue west and underwater to Italy. The important questions that remain regard the quantities of gas Greece will retain and at what prices. According to Russian estimates, Greece’s gas requirements will double to about 6 billion cubic meters over the next eight years. The pipeline will have a capacity of 10 billion cubic meters, so it remains to be seen what part of this Greece will retain. The country is already supplied by Russia’s Gazprom and by Algeria with gas and will receive further quantities via the Turkey-Greece-Italy pipeline now under construction. Such questions are expected to be answered in negotiations between Greece’s Public Gas Corporation (DEPA) and Gazprom over the next 18 to 24 months. Optimists believe the pipeline will be ready by 2013. Another part of the negotiations will concern the extension of the existing agreement with Gazprom, which was signed in 1997 and expires in 2017. Greece is said to be aiming for an extension to 2040.