Gazprom Commits to Costly South Stream Pipeline Project

Gazprom and its partners in the South Stream gas pipeline that runs under the Black Sea to Europe have formally confirmed the launch of the 16 billion euro project, with a final deal with a Slovenian partner finalized on Tuesday. The direct supply of natural gas to Europe is expected to start in the first quarter of 2016, with up to 63 billion cubic meters of natural gas delivered to European consumers by 2018. The cost of South Stream, including the pipeline’s overland sections could reach as high as 24 billion euro billion taking into account the onshore sections, experts estimate. The South Stream pipeline was designed to diversify Russian gas routes to Europe and to compete with the rival EU-backed Nabucco pipeline project.

http://rt.com/business/news/gazprom-south-stream-commitment-675/

Putin Wants Gas Exports to Focus on Asia

In light of falling demand in Europe, as well as the EU's recent anti-monopoly probe of Gazprom, President Vladimir Putin ordered a review of Russia's natural gas export policy to take advantage of rising Asian demand.  "The priorities should be supplies to the domestic market, our own economy and our enterprises, as well as diversification of markets to account for the prospective Asian segment and means of delivery," Putin told a Kremlin energy policy commission.  Russia, the world's second-largest producer of natural gas after the United States, has for years unsuccessfully tried to secure a deal to sell pipeline gas to China, the world's largest energy consumer. The two countries have failed so far to iron out differences over issues such as price and routes.  As part of a closer supervision of energy policy Putin has also warned Gazprom to begin developing Arctic oil and gas deposits, including its Bovanenkovo field in the Yamal peninsula.  Gazprom has delayed the commissioning of Bovanenkovo, discovered in the 1960s, several times due to weak gas demand and to an anticipated large capital outlay necessary to develop it ($10 billion over several years).
http://www.reuters.com/article/2012/10/23/us-russia-putin-energy-idUSBRE89M0RR20121023