EDF May Take Stake In South Stream Pipeline

EDF, the French utility giant, has just announced on Wednesday that it may be acquiring a minority holding in Russian Gazprom’s South Stream gas pipeline project. The pipeline has bee designed in order to bring

Russian gas under the Black sea and down into Europe bypassing the Ukraine.
A spokeswoman for the company said that EDF was in talks with Gazprom to receive a minority stake in the project. However, no details were given as to dates and financials. Other reports have indicated that the EDF stake could possibly be as much as 10 percent, which the company would assume in November. These were also released on Wednesday.

Gazprom retains a 50 percent shareholding in the South Stream project, with Italian oil and gas company ENI holding the remaining 50 percent of stakes. If EDF takes a 10 percent stake, then each company will retain 45 percent of shareholdings for the project.

Earlier in the month, EDF CEO Pierre Gadonneix announced that EDF would enter talks to join the constorium but that no agreement would be reached for sometime. Russia wants the South Stream pipeline to be built quickly, as the country supplies a quarter of Europe’s natural gas and disputes with Ukraine and other ex-Soviet countries are becoming costly. Transit payments have been the cause of conflict for bordering countries with Russia for sometime now.

South Stream, once completed, will operate as the main competition for the EU-US funded Nabucco pipeline which supplies natural gas to Europe from the US. The pipeline was established in order to decrease Europe’s dependence on Russian gas supplies. Gas on the Nabucco pipeline comes from the Caspian region.