South Stream signs pipe supply contracts

South Stream Transport has contracted three pipe mills to supply over 75,000 steel pipes for the first line of the South Stream offshore pipeline. Europipe from Germany will supply 50% of the pipes, OMK from Russia 35% and Severstal’s Izhora pipe mill in Russia another 15%. The contracts are worth some €1bn.

 

The South Stream project comprises four parallel pipelines of 931 km each, with a diameter of 32 inches (approximately 813 mm) and steel walls some 39 mm thick. The contracts cover production of over 75,000 steel pipes of 12 metres for the first pipeline. A tender for the second pipeline is still ongoing, with the aim of awarding the contracts in 1Q2014.

 

The first pipes will be delivered to storage yards at the Bulgarian coast of the Black Sea this summer. The first offshore pipeline is scheduled to start operations by the end of 2015. When fully operational, South Stream will have an annual capacity of 63bn cm.

 

Gazprom holds a 50% stake in the South Stream Transport joint venture, partnered by Eni (20%) and EdF and Wintershall (each holding 15% interests).