The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Paolo Scaroni, Chief Executive Officer of Eni.

The meeting participants discussed the implementation of the Strategic Partnership Agreement in the energy sector. In particular, the parties confirmed the mutual commitment to fulfilling the agreements reached on the South Stream project and underlined the importance of rapid completion of a feasibility study (FS) for the offshore section of the pipeline. Alexey Miller and Paolo Scaroni expressed a unanimous opinion on the need to step up the activities of the special-purpose company South Stream AG.

The parties also welcomed EDF in the South Stream project and agreed on launching the negotiations with the French company.

Eni and Gazprom coordinated the terms and conditions for engagement of the Russian Company into the Elephant project in Libya. The parties will prepare the relevant agreement in the coming days and submit it to the Libyan Government for approval.

In addition, the meeting drafted a plan of joint activities on developing the SeverEnergia assets. It is projected to start production from the Samburg field in 2011 and to reach the nominal capacity in 2013.

Background:

Italy is the third-largest Russian gas importer in Europe. According to the provisional estimates, in 2009 Gazprom supplied Italy with 19 billion cubic meters of natural gas.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market starting from 2007. Gas supply volumes will be gradually increased to 3 billion cubic meters per annum by 2010. Under the Agreement the existing contracts for Russian gas supplies to Italy have been extended till 2035.

On June 23, 2007 Gazprom and Eni signed the Memorandum of Understanding for the South Stream project execution. The Memorandum sets the directions of cooperation between the two companies in the South Stream engineering, financing, construction and management sectors.

On May 15, 2009 Gazprom and Eni signed the second Addendum to the Memorandum of Understanding of June 23, 2007 on further steps in implementing the South Stream project. The Addendum stipulates an  increase in annual throughput capacity of the pipeline’s offshore section from 31 to 63 billion cubic meters of gas and regulates the gas marketing issues within the project.

SeverEnergia is currently a joint venture of Gazprom (51 per cent stake) and the Italian partners – Eni and Enel (49 per cent of shareholding through a joint venture split between Eni (60 per cent) and Enel (40 per cent)). The company holds licenses for hydrocarbons exploration and production in Western Siberia.