Leonid Chugunov, Head of the Gazprom Project Management Department held negotiations in the Republic of Montenegro with Igor Luksic, Prime Minister of the Republic, Milan Rocen, Minister of Foreign Affairs and European Integration and Vladimir Kavaric, Minister of Economy.

The parties addressed technical capabilities and prospects of Montenegro to join the South Stream project that was a desirable goal of the country according to the announcement it had made in the end of the previous year. A decision was taken to elaborate the feasibility study for the gas lateral construction to Montenegro as part of the South Stream project.

Background

With a view to diversify the natural gas export routes Gazprom is implementing the project for construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe – the South Stream project.

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 shareholders of South Stream Transport AG signed the Shareholder Agreement for the offshore section of the project. Pursuant to the Agreement, Gazprom holds 50 per cent in the offshore gas pipeline project, Italian Eni – 20 per cent, German Wintershall Holding and French EDF – 15 per cent 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.

The Consolidated Feasibility Study contains key engineering solutions of the project including their substantiation, environmental safety assessment and environmental measures, economic efficiency evaluation including capital and operational expenditures.

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.