wealthy british style is an expert on. the. market why now can only. find out what's really happening to the global economy is cause a report on. the headlines now here about. greece's new finance minister takes office with a hard task of convincing people to accept further austerity cuts as a second wave of bailouts cast a shadow of the future of the euro asians are turkey desperate to join up and now having a rethink. president of bennett criticizes the state's role in the russian economy and slams corruption for threatening the country's development speaking at the

international economic forum in st petersburg reinstated its commitments to modernization drastic measures to create a better investment current. e.u. plans a third set of tougher sanctions against syria as a crackdown on protesters continues to be claiming at least sixteen lives on friday but some experts warn the sanctions could be paid on the way for it would be a start intervention. the next star interview show spotlights it talks to the budget leader of the south stream gas pipeline also claim much more than you could mean for supplies to europe. hello again and welcome to spotlight the interview cheryl on r.t. and i'll do another one today my guest this marcel grammar russia isn't bursting

heart into the south stream pipeline a direct and independent gas shipping route to you but as the project is gaining momentum there is criticism in some quarters that south stream is unprofitable and has no future not to do the project leaders have to say today here's the c.e.o. of the south stream marcel crammer joining us from st peter's world economic forum . after the gas row between russia and ukraine left europe freezing moscow decided to develop an independent group to secure its gas supplies south stream i believe along the bottom of the black sea and then on into europe and critics say these pipelines will make western europe even more dependent on moscow every thought household on the continent of russian gas. means our streaming best to gazprom is working hard to prove that even a joke like. hello is

a crime or welcome to the show thank you very much for being with us. well first of all first of all i'd like to ask you about your presentation in brussels on the twenty fifth of may did this presentation somehow change the attitudes in the e.u. towards the south or do they still have questions about the project. well i think it was a very successful event so. there was a very good presence not only of the many partners in the sauce. project but also of e.u. officials and service from various institutions. we consider this session success also because the european commissioner confirmed the importance of energy relations and of the southeast project the search. to those real agents and

use the words this is clearly a priority also for the e.u. and we will find good ways to work with it and to support it so i think all in all . we are now at the point where we have a good basis for further and perhaps more detailed discussions. do you believe that you will succeed in getting a priority status for south stream in the e.u. exempting it from the european union rules requiring it to share its infrastructure with third parties. well there is an ongoing discussion between the european commission and the russian government about an overall agreement with regard to how gas infrastructure could be treated and i think we should wait and see how that agreement works out and what exactly that means for

the status of the project at the same time it is clear that the participants in the project and they represent about one third of all e.u. member states. feel very strongly alone with russia that this project these stores clear priority status so we're working on that or discussing it and we're up to mystic about. russia's energy minister mr expects to sign an agreement with the e.u. this autumn what kind of agreement could it be those russia want to have this. same preferences as new google for example or are you ready for a compromise. well i think we see this quite separately from whatever book or partners may have arranged among themselves or with the e.u. or with the new member countries what we really want to make sure of is that whilst

we of course respect the the legal framework within the european union when we work what we want to make sure of is that whatever specific measures are taken do not in any way undermine the economic viability of the project for the entire duration of the operations of the project we want to have a clear stable and supported its legal and regulatory framework so that's what we're working well many experts by the way say that from the economic point of view the modernization of ukraine's gas pipelines system would be a cheaper solution than constructing a new underwater adeline is it true or does moscow believe that ukraine has lost its credibility as a reliable partner. but i think in general the transit networks need modernization a good example of that is also the north stream project which is now for its first

stage nearing completion it's a great success which will also ensure stable long term supply so one modern system and on the modern managed. all i can say about the ukraine situation is that it is clear that all the partners in the south stream project have collectively. agreed that. this was obvious from the actions they are taking now that it would not be wise to and tire leaders rely on the ukraine for fuel. thank you transit for the kind of volumes that have been flowing so there are so far so. what that sums up to is really the ukraine will likely continue to play a role in transit to europe. but we will also have a modern today and well managed transit system in

the form of a shower stream. which implies that there's going to be additional security of supplies for for your role of the south stream promises to to to pump up to sixty three billion cubic meters of gas they year do you already know the source is going to get the gas to fill the pipe. the the market in the end fills the site the exact volumes work is being now done is being done now to conclude those contracts to capacity of south stream india and that means in twenty nineteen will be sixty three b c m you're right about that but we see it gradually increasing from a much much lower level at the end of twenty fifteen to that sixty or sixty three

b.c.m. capacity about forty four years later in the enter market will be the church though because the contracts have to be signed. and we will see partly new gas and we will see partly rerouted gas gas flows that are now today still going through ukraine it will be a mix where were you talking about this really route and gas well the gas that's now going through cons through ukraine is. a lot of it going to be diverted into sites is south stream a significant part yet or how much. well you know significant. it's always open to ones of what they should what that means but we have a basic supply scenario for so stream which says that two thirds of the volume going through south stream could be volume that is now going through the ukraine system. many analysts say that they expect

gas from to revise south range price tag upward this year as the prices for commodities like steel and cement also climb is this the reason why the publication of technical and economic assessment of the project was delayed until the the end of the year if i'm not mistaken. no i don't think there's any correlation in that respect to your project is on schedule we are working hard on many different aspects including the final. conclusion of the preferred routing of the entire five price or some expect that to be ready sometime in the start was. cheaper than sound sleep does it make me more competitive in south stream. but first of all i haven't heard any firm

and final numbers for i don't know google or south stream for south stream or using a preliminary estimate which as they say is likely to be only order of magnitude of ten billion euros for the offshore park in the black sea and approximately another five or parked to the transit countries on the way to it's early and austria. that's a very preliminary estimate the final budget will be available when we take the final investment decision. and i think we'll have to wait and see therefore we review also. i do not have a good comparison with any other projects on our book though it is clear that a number of the participants and they have said so publicly extract much higher of course than originally estimated. and we will have to wait and see whatever they come up with when they take

a final investment decision before that it is really until that point it's really not so we easy to talk about who is cheaper or more expensive the key is. if you have sufficient gas will suit a pipeline that of course significantly improves the economics and that seems to be an issue for some of the other pipeline projects. such as noble coal but are more. to do you feel the competition from the book anyway. but i don't i don't see the sentence of competing projects they are very different in nature and a book called very heavily of course depends on the ability to get adequate gas supply large volumes of gas supply into the market through the pipeline system in this case the gas is available we're really talking about new infrastructure for security will supply and not about the need to find large additional

suppliers large additional volumes of natural gas so in that sense really they're not quite competing also time wise what i've read at least what we're not following a day today is that the number of partners expect to be quite a bit later than the planning we have for so steve says marcel crammer the c.e.o. of south trade who is joining us from st petersburg from the economic farm stuff like we'll be back shortly right after a break so stay where you are. last

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market. find out what's really happening to the global economy for no holds barred look at the global financial headlines to kinds of reports on our. welcome back to spotlight i'm just a reminder that my guest on the show today is going to sell. the south stream who is joining us from st peter's been from the economic forum. grammar we started talking about about south stream about in the book about competitiveness of these two projects but as far as i understand natural gas which you pipe which you pump through the pipes also all sas competition like the new sources of gas for

example the shale gas and the liquefied natural gas they're putting downward pressure on natural gas prices is this really the trend is a true. well you know i think we have to look at the alan g. and chill guys in quite a different way. the shale gas first of all. we know the story about the us for a large or rather unexpected volumes of shale gas have gone through the market there. we are now as an industry looking very hard at what could be the possibilities elsewhere in the world and what i'm hearing about europe in that respect is that yes there are in geological terms certain possibilities it is not yet quite clear. how complicated some of that production will be in europe it could be quite different from the u.s. and there are a number of the environmental issues around shale gas. which may also delays

some of its development particularly in europe which is more densely populated than most places. and we dare for have to wait and see about the general view is that we would not expect significant volumes of shale gas to come to the markets in europe until at least twenty twenty five or beyond. there may be some production in some parts of europe before that but that would not really impact the south stream project at all and alan g. well let's wait and see it is true that we have more elegy receiving terminals now in europe than we had let's say five or ten years ago that's good news that gives the market more options more flexibility. but we also have to wait and see how much of that liquefied natural gas is actually coming to europe and much of that will be fined on pricing so we'll have to wait and see i think

a large modern pipeline system such as self-esteem is definitely proven to be very competitive that's always been the case in the history of the gas industry and it will be the case for itself. but i you know russian partners are russians ready to to meet this new possibilities the new challenge challenges which we're talking who are or are they are still pretty conservative then and still prefer to to make their money the old way i mean by pumping gas into europe through part phones. well i'm not here to talk for all the companies that are in this business so i'm really focusing on the starting pipeline project the search but let me see. so if you have large natural resources to conventional resources of natural

gas that can be produced if you also have possibilities for further optimized issues within your current system much of that is likely to be economically more attractive then centering into all kinds of new technologies that being said i am sure that russian companies including gas will follow the developments very closely they already do that and are seriously involved in l. and g. trade and in energy production they will also follow very closely what happens to shale gas but it is definitely not seen as something that they will large scale jump on in the immediate future because you have so much conventional gas that can be competitively produced a market that is still a very. mr hammer you have quaint many times that the south stream is a project of european interest that what you say but then arguments against states

in the u.k. new who's interested in did reeling this project in here and is again except ukraine first. but i would say that you know it it is obviously a project in european interest europe needs to import more gas europe wants to do that in a secure and stable manner and so safe and secure a new transit routes are obviously one way to do that on top of that you have many european companies and countries such as the southeast the east european countries directly involved and wanting to see the project realized so i don't really doubt that this is a project of major european influence it brings good natural gas supply secure supply for the long term the ability to. plan for a for a cleaner environment for renewables and so on and so forth so we are feeling

quite strongly about that and it's not only us and the project itself but also other companies involved now of course there will be. always people around in europe who see their somewhat differently that's fine i'm sure we can convince. i guess that turkey is giving us some headaches lately kenyan lightness how long according to your assessment will it take to reach an agreement with the troops on laying the underwater part of the pipeline in their territorial waters. well i know there's an ongoing discussion. about certain details of the arrangements between between moscow and ankara we in the project that such are not directly involved in that so i can't really comment on it clearly also here the

importance of the overall relationship will dominate the discussion and will lead to a good resolution. but is there still a risk and i've read about it in some and some analysis in the paper is that the third position the tough position may even change the route. south stream pipeline may this be true. well we are looking at the overall route at the moment and the terminating. over the next few months and when that decision is being made sure all the aspects such as the position of transit countries and others and folks will be taken into account. they see where you laying the part. pipeline is called the black sea and some some people say that that the south stream is a project there that may really turn the sea into

a black sea literally it's not black yet thank god i mean all they really huge environmental risks for the black sea i mean the little lady they the underwater pipeline. is this true. well i have to say you know all the questions about the environment impact in general the project or in specific locations have to be taken very very seriously. if you look at offshore pipeline projects for natural gas such as north stream but also many many of those in the north sea for example the norwegian sector the british actor and cetera and elsewhere in the world you can really say that transporting natural gas in a biplane. is not in itself at all survivors exorcisms now that being said for the specific route you have to of course of for

any negative impact on the seabed and on the environment where you can but transporting. through. an area such as the black sea in itself is a perfectly safe. when will the final agreements when will they be signed with. the false and also the winter shall the french and the german companies about the condition of their participation in your project. well they're working hard together to. resole for. some outstanding issues this is a large and complex projects will naturally as has been the case in other projects this takes some time. but i'm told for then none of them wants to take it any longer than necessary so we're looking forward to the conclusion that it's not in

my hands to turn charlie and there's. another question about deals i know gas problem is negotiating with iran its participation in the south stream project how high is the probability that iran will join south freemen what may the conditions be. i'm not aware of or or involved in any of those negotiations we are focusing on the preparations of cult of the project the start and we will see when you can target shareholders for what for what percentage so i can't really comment on that question i think that's best addressed to casper. thank you thank you very much for being with us and just a reminder that my guest on the show today was marcel primary the c.e.o. of south street and that's it for now from all of us here if you want to have your

sense about right or have someone in mind here think i spent the next time here drop me a line an hour an hour at. our heels and let's keep the show interaction we'll be back with more for a special comment on what's going on in and outside russia and so then stay on r.t. and take care.