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 focused on the progress with the South Stream gas pipeline construction project. The parties discussed the issues of preparation for the Final Investment Decision to be made by the joint project company in relation to the offshore gas pipeline section.

As a result of the talks, Alexey Miller and Paolo Scaroni confirmed their interest in continuing the dialogue on the main thrusts of bilateral cooperation as part of joint projects between Gazprom and Eni in Russia and in third countries.

Background

Italyis the second largest importer of Russian gas in the European Union after Germany. Gazprom and Eni are connected by a long-standing partnership.

In 2011 the amount of gas supplied by Gazprom to Italy equaled some 17.1 billion cubic meters.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement. Under the Agreement, the existing contracts for Russian gas supplies to Italy were extended until 2035 and Gazprom began to directly supply the Italian market with natural gas in the amount of up to 3 billion cubic meters a year and was entitled to acquire stakes in Eni's international assets.

For the purpose of diversifying natural gas export routes Gazprom is constructing a gas pipeline across the Black Sea to Southern and Central Europe – the South Stream project. The design capacity of the offshore gas pipeline section will amount to 63 billion cubic meters a year.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria in order to implement the onshore gas pipeline section.

On September 16, 2011 the South Stream Transport Shareholders Agreement was signed for implementation of the offshore gas pipeline section. As a result, Gazprom acquired a 50 per cent stake in the project, Eni – a 20 per cent stake, Wintershall Holding and EDF – 15 per cent stakes each.

In the third quarter of 2011, the Consolidated Feasibility Study of South Stream was finalized and included the feasibility study of the offshore section and feasibility studies of the respective gas pipelines in the host countries of Southern and Central Europe.

On December 30, 2011 Vladimir Putin, Prime Minister of the Russian Federation authorized Gazprom to speed up the launch of the South Stream project and to start its construction in 2012.

On January 20, 2012 Alexey Miller, Chairman of the Gazprom Management Committee held a meeting to approve the detailed action plan ensuring the South Stream gas pipeline construction launch in December 2012.

First gas supplies via the gas pipeline are scheduled for late 2015.