May 14, 2009

The Magic Number


News saturation alert: "Russia's Gazprom will sign agreements to build the South Stream pipeline with all countries involved this Friday, said Greece's development minister today."

Gird your loins for an avalanche of pipeline op-eds.

By the way, Gazprom continues to assert the project will cost a mere €10 billion. Does that figure seem too low? It should. In March, Aleksandr Medvedev's private presentation to investors projected a cost of €19 billion to €24 billion.

At that price, the project will be hard pressed to make its money back -- especially since no-one inside the Kremlin has explained exactly how Gazprom is going to fill it with gas.

1 comment:

Anonymous said...

P&D --

On May 10, Gazprom's production was 0.975 bcm/day, its lowest level since 1983. Domestic demand in December-April was down 8-12 percent year-on-year, while exports to Europe were down by 21 percent year-on-year on May 1-5.

Lowest production since the staaaaaaagnation era of Andropov...