RUSSIA - The New Export Pipelines.

Problems over pricing, transit fees and thefts with Ukraine and Belarus had since the early 1990s compelled Gazprom to have alternative routes for piped gas to reach its main European markets directly. There are at least three pipelines planned for Europe and two pipelines from East Siberia to China.

Germany, by far the biggest market for Russian gas, is to receive a major part of its Russian supplies direct from the 1,200-km, 55 BCM/y Nord Stream (NEGP) being built under the Baltic Sea from a point near St Petersburg to the German coast at Greifswald, and to be ready in 2011 with an initial throughout of 27.5 BCM/y. Created in late 2005, NEGP Co. (NEGPC) is a JV of Gazprom (51%) and the German giants E.ON (utility) and BASF (chemicals) with each holding 24.5%.

NEGPC is chaired by former German Chancellor Gerhard Schroder and its managing director is Matthias Warnig, who until March 2006 was chairman of Dresdner Bank ZAO in Russia. The project is expected to cost more than $11 bn, twice as much as originally planned. The main advantage of this pipeline is Russia will no longer have to negotiate transit fees with nearly half a dozen states or pay them in gas. A possible spur connection to Sweden has been considered. Polish and Latvian leaders have expressed frustration that they were not included in the project.

The 30 BCM/y South Stream is a partly marine pipeline from the Black Sea to Europe, a JV led by Gazprom and ENI of Italy and including Central European firms such MOL of Hungary and SerbiaGaz. This is to be on stream in 2013.

South Stream's first component is to send gas from the same starting point as the Blue Stream at Beregovaya for under the Black Sea, at a maximum water depth of over 6,500 ft. The second, onshore component will cross Bulgaria with two alternatives: one directed to the north-west, crossing Serbia and Hungary and linking with existing gas pipelines from Russia; and the other to the south-west through Greece and Albania, linking directly to the Italian network. Russia and Bulgaria signed an inter-governmental agreement on the pipeline in January 2008.