Greece-Russia sign memorandum of cooperation for natural gas pipeline project

The memorandum, signed in St Petersburg by Greek Productive Reconstruction, Environment and Energy Minister Panagiotis Lafazanis and Russian Energy Minister Alexander Novak, envisages that the company which will build and operate the project will be equally owned (50-50) between Greece and Russia, while the Russian side will offer funding facilities using future revenues from the project as collateral.

Lafazanis also signed a joint declaration for the support of the project with the president of Vnesheconombank–VEB, Vladimir Dimitriev.

The memorandum, characterized as “of historic significance” by the Greek ministry, underlines –among others- the need to strengthen European energy security through the divergence of natural gas routes to European markets, safeguarding supply stability of Greece with natural gas from Russia and the ability of transporting natural gas towards third countries.

For the construction of the project, a special purpose company will be set up (50-50), while new shareholders will be able to participate following agreement. Greece will be represented by Public Enterprise of Energy Investments, soon to be set up.

The pipeline will have a transport capacity of 47 billion cubic metres of gas annually. Greece and Russia also pledged to facilitate the special purpose company so that “third parties to be named by the Russian founder to pledge up to 100 pct of the pipeline’s capacity for natural gas supplies which will be transported through Greece”. Also, Greece will offer all legal support to issue all necessary licenses and the interconnection of the pipeline with the Greek natural gas transmission system and third countries’ systems.

The natural gas pipeline system, currently designed, will by-pass Ukraine, through the Black Sea, through Turkey and Greece, towards Europe.