Russ Oil-Gas

MOSCOW, January 28, 2009 (RIA Novosti) - The capacity of a gas pipeline designed to pump gas to the Balkans and other European states is expected to be boosted by 16 billion cubic meters annually, Gazprom Deputy Chairman Alexander Medvedev said on Wednesday. The first deliveries along the South Stream pipeline are scheduled to start in 2013. The project, expected to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, involves Bulgaria, Serbia, Hungary, Italy and Greece. "We are not only planning to launch the Nord Stream with a capacity of 55 billion cubic meters and the South Stream with 31 billion cubic meters capacity, but also to increase South Stream's transit capacity by another 16 billion cubic meters," Medvedev said in an interview with the international TV news channel Russia Today. The Nord Stream pipeline, which will pump gas from Siberia to Europe under the Baltic Sea, is being built jointly by Gazprom and Germany's E.ON and BASF and Dutch gas transportation firm, Gasunie, at an estimated cost of $12 billion. The Gazprom official said this move was economically justified. "Demand is available and it is more economical to have a gas pipeline with a capacity of 47 billion cubic meters instead of 31 billion cubic meters," Medvedev said. Gazprom is implementing the projects to build a gas pipeline under the Baltic Sea to pump gas directly to Germany and a gas pipeline under the Black Sea to pump gas to the Balkans and other European states to diversify its gas export routes, especially in the light of the recent gas row between Moscow and Kiev that saw gas transits to Europe suspended for two weeks.