Today, in the presence of Vladimir Putin, President of the Russian Federation and Romano Prodi, Prime-Minister of Italy, Alexey Miller, Chairman of the Gazprom Management Committee and Paolo Scaroni, Chief Executive Officer of ENI signed a Supplement to the Memorandum of Understanding for the South Stream project execution.

The Supplement stipulates a Special Purpose Entity (SPE) set up with a view to execute marketing research and to develop feasibility study for the project.

Within the meeting Alexey Miller and Paolo Scaroni decided to establish SPE until January 15, 2008, to complete marketing research and feasibility study for the South Stream project until the end of 2008 and to start supply gas via the gas pipeline in 2013.

“Today’s event points to further development of the strategic partnership between our companies. I am sure that a new gas pipeline system, which meets modern environmental and technological requirements will significantly raise energy supply security of the whole European continent,” said Paolo Scaroni.

‘The Supplement signed today is both a significant contribution of our companies to the mutually beneficial cooperation development of Russia and Italy as well as a good example of integration for the benefit of European consumers. Our joint efforts and experience will allow to successfully implement this large-scale project, which is aimed at providing reliable and long-term gas supply to European consumers,” said Alexey Miller.

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On June 23, 2007 Gazprom and ENI signed a Memorandum of Understanding for the South Stream project execution.

The Memorandum sets the cooperation directions for both companies in the South Stream engineering, financing, construction and management sectors.

The South Stream is a gas pipeline system, which will join Russia and Europe across the Black Sea. The total length of the Black Sea gas pipeline section is around 900 km, the total depth is more than 2000 m, and design capacity is nearly 30 bcm.

The parties examine different construction routes for the onshore section crossing the territory of the European Union member countries. Within the project execution Gazprom and ENI will utilize modern technologies in compliance with the strict environmental requirements.

Gazprom and ENI participate in the Blue Stream project implementation (gas main development for direct Russian gas deliveries to Turkey through the offshore section of the Black Sea). Gazprom together with ENI created a joint venture Blue Stream Pipeline Company to provide financing, pipeline construction and its operating. Blue Stream was launched in 2003. In 2006 Turkey received nearly 7 bcm of gas and in 2007 Turkey will receive nearly 10 bcm of gas.

In November 2006 Gazprom and ENI signed the Agreement on strategic cooperation stipulating an opportunity for Gazprom to provide direct Russian gas deliveries to the Italian market in 2007. By 2010 annual gas volume supplied will reach 3 bcm. The Agreement foresees prolongation of existing contracts for gas supply up to 2035.