hello again and welcome to spotlight the entire we share on our take and i'll do another one today my guest is marcel grammer russia isn't the first thing hard into the south stream pipeline a direct and independent gas shipping route to you but as the project is gaining momentum there's criticism in some quarters that south stream is unprofitable and has no future no one to do the project leaders have to say today here's the c.e.o. of the south stream marcel primary joining us from st peter's world economic forum . after the gas role between russia and ukraine left europe breezing moscow decided to develop an independent group to secure its gas supplies south three believed along the bottom of the black sea and then on into europe but

critics say this pipeline will make western europe even more dependent on moscow today every fourth household on the continent consumed russian gas. mains our streaming past a gas problem is working hard to prove the eventual the pipeline. 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 attitude in the e.u. towards the south stream or do they still have questions about the project. well i think it was a very successful event so. there was a very good price and smote only of the many partners in the south stream project but also. of e.u.

officials and service from various institutions. we consider this session success also because the european commission are confirmed the importance of energy relations and of the southeast projects such. as 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 along with russia that this project these are clear priority status so we're working on that or discussing it 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 does russia want to have the same preferences as nobuko. for example or if you're ready for

a compromise. well i think we see this quite separately from whatever partners may have arranged among themselves or wait to eat with the e.u. 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 pipeline system would be a cheaper solution than constructing

a new underwater pipeline 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 to great success which will also ensure stable long term supply so a modern system and on the modern management 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 is obvious from the actions they are taking now that it would not be wise to and tire leaders rely on the ukraine for transit for the kind of volume. that has been going

so well there so far so. what that has done 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 up to date and well managed transit system in the former south stream. which implies that there's going to be additional security of supply or for your call 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 to be until the site the exact volumes work is being now done is being done now to conclude those contracts the capacity of south stream in the end

that means in twenty nineteen will be sixty three p.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 p.c.m. capacity about forty four years later in the end to market will be the judge though because the contracts have to be signed. and we will see part of the new gas and we will serve partly rerouted gas gas flows that are now today still going through the ukraine it will be a mix while you're talking about this really rooted gas well the gas that's now going through fun through ukraine is. a lot of it going to be diverted into sites a south stream a significant part yet or how much. well you know significant it's always open to to one. but they should what that means but we have

a basic supply scenario for south stream which says that up to 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 sings price tag afterward 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 unified not mistake. no i don't think there's any correlation in that respect the project is on schedule we are working hard on many different aspects including the final. conclusion of the

preferred routing of the entire pipelines are stunned we expect that to be ready sometime in the start quarter. nabucco is cheaper than sound does it make new book more competitive than south stream. but first of all i haven't heard any firm and final numbers for i don't know google or south stream or south stream or using a preliminary estimate which as it is likely to be on the order of magnitude of ten billion euros for the offshore part and of like c. and approximately another five shore parked through the transit countries on the way to italy 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 read you all still do not have a good compare. with any other projects on nabucco it is clear that

a number of the participants and they have said so publicly expect much higher costs 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 easy to talk about who is cheaper and more expensive the key is. if you have sufficient gas flow through the pipeline that of course significantly improves the economics and that seems to be an issue for some of the other five life projects. such as noble coal but are more have the deed to the do you feel the competition from the book anyway. well i don't i don't see the sentence of competing projects they are very different in nature in 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 the south stream case the gas is available we're really talking about new and cost structure for security of 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 but we're not following a day to day is that the number of partners expected to be quite a bit later than the planning we have for southeastern. says marcel crammer the c.e.o. of south trade who is joining us from st petersburg from the economic foreign spotlight will be back shortly right after a break so don't go stay away or. the

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a beach front field several kilometers long. and now there is only one person who cares. to see we are surrounded by garbage everywhere but also there are. on this beach which of course is a very most appropriate city signification a symbol of everything that's wrong with our goddamn government allowing not only garbage but to accumulate where so many guys died. a new battle is going on. the history be protected. returned to tara what julian cooper story on our teeth.

thank. you. welcome back to the spotlight i'm out there not even just a reminder that my guest on the show today is going to sell crammer he is the c.e.o. of the south stream who is joining us from st peter's been from the economic forum mr krammer we started talking about about south stream bad in the book all about competitiveness of these two projects but as far as i understand natural gas which you pipe which you pump through the pipes also has also has 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 this is a true. well you know i think we have to look at the l.n.g. and chilled gas in quite a different way. the shale gas first of all we know the story about to us very large and rather unexpected volumes of shale gas have come to 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 the production will be in europe it could be quite different from the u.s. and our number of environmental issues around shale gas. which may also did. some of it's 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 will do 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 this ousting project at all and alan g. well let's wait and see it is true that we have more alan sheen receiving tar minerals now in europe than we had let's say five or ten years ago that's good news it 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 find 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 with cells. but i you know russian partners are russians ready to to meet this new possibilities the new challenge challenges of which we're talking because quite a quarter they are still pretty conservative and and still prefer to to make their money the old way i mean by pumping gas into europe through pipelines. well i'm not here to talk for all the companies that are in this business i'm really focusing on the south stream pipeline project as such but let me say this if you have large natural resources conventional resources of natural gas that can be produced if you also have possibilities. well for the to my

station within your current system much of that is likely to be economically more attractive than venturing into all kinds of new technologies that being said i am sure that russian companies including gas from will follow the developments very closely they already do that and are seriously involved in l. and g. trade and then and she 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 available. mr krammer you have claimed many times that the south stream is a project of european interest that what you say but this argument against sits in the european union who's interested in derailing this project. is against except

ukraine force. well i will 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 all through history 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 interest it brings good natural gas supply secure supply for the long term the ability to plan for a for a cleaner environment for renewable sensible woman soulforce so we are feeling quite strongly about that and it's not only us in the project that's a. but also other companies involved now of course there will be. always people

around in your somewhat differently that's fine i'm sure we can convince. i guess that turkey is giving you a headache lately kenyan lightness how long according to your assessment will it take to reach an agreement with the turks 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 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 in time. but is there still a risk and i've read about it in some and some analyses in the papers that the turkish position the tough position may even change the route of the south stream pipeline may this be true. well we are looking at the overall route at the moment and terminating. over the next few months and when that decision is being made sure all the aspects such as the position of transit country and others involved will be taken into account. they see where you laying the per pipeline is called the black sea and some some people say that that the south stream is a project that may really turn the sea into a black sea literally it's not black yet. thanks god that well i mean are they

really she environmental risks for the black sea i mean the little lady 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 the cultural 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 etc and elsewhere in the world you can really say transporting natural gas in a biplane on the seabed is not in itself at all survivors exercise now that being said for the specific route you have to of course of any negative impact on the seabed and on the environment where you can but transporting

gas. through. an area such as the black sea in itself is a perfectly safe activity. when will the final agreements one movie be signed with. the false and also the winter shall the french and the german companies about the condition of that put this a patient in your project. well they're working hard together to. resole for. some outstanding issues this is a large and complex project so naturally as has been the case in other projects this takes some time but i am called for than. none of them wants to take it any longer than necessary so we're looking forward to the conclusion but it's not in my hands it's entirely in. 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 remained what made the conditions of the . i'm not aware all or or involved in any of those negotiations so we are focusing on the preparations of both of the project the search and we will see when the shareholders for what for what percentage is so i can't really comment on what course i think that's best addressed to gospel thank you thank you very much for self for being with us and just to remind that my guest on the show today was marcel tram or the c.e.o. of south street and that's it for now from all of us here if you want to has your sense spotlight or have someone in mind here think i spent the next time just drop

me a line at talbot enough at. our hero and let's keep the show interaction we'll be back with more first then comment on what's going on in and outside russia and so then stay on r.t. and take care.

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