The Gazprom Board of Directors reviewed the progress with the South Stream project.

The meeting discussed the operational status of the offshore and onshore sections of the gas pipeline. It was underlined that the project was being implemented according to schedule and the South Stream construction would be launched in December 2012.

The Gazprom Management Committee was tasked, together with the foreign partners, to proceed with the action plan aimed to provide the conditions for adopting the final investment decision needed to launch the construction of the South Stream gas pipeline's offshore section.

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 the South Stream Transport shareholders signed the Agreement for the offshore section of the project. Pursuant to the Agreement, the stakes in the offshore gas pipeline project are distributed as follows: Gazprom – 50 per cent, 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.

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 approved a detailed action plan that would make it possible to start construction of the South Stream gas pipeline's offshore section in December 2012.

On April 12, 2012 Gazprom's foreign partners on South Stream Transport AG finally joined the project company.

First pipeline gas supplies are slated for the late 2015.