Prime Minister Vladimir Putin and Italian Prime Minister Silvio Berlusconi have discussed issues of gas cooperation.
Germany may join Russia, Italy and France in the South Stream project, a proposed gas pipeline to transport Russian natural gas to the Black Sea, Bulgaria and on to Italy and Austria.
Prime Minister Vladimir Putin discussed this prospect with his friend and counterpart Silvio Berlusconi, who supported Putin's proposal, even though this is sure to create more problems than benefits for the Italian leader.
Silvio Berlusconi travels to Russia frequently owing to his close friendship with Vladimir Putin. This time he has come on a personal visit to celebrate Putin's 58th birthday and to go fishing, weather permitting. Both prime ministers spent the weekend in St Petersburg where the weather has been fantastic lately. They took a walk near a local pond and talked business. Vladimir Putin caught a fish while discussing the future of the South Stream pipeline.
"I would like to ask your advice on the ambitious project South Stream. I have already told you that German energy companies have expressed a desire to join the project. I would like to hear your opinion on this matter," Putin told Berlusconi.
This question was not asked for the sake of curiosity alone. Gazprom has repeatedly noted that it does not want to give up its 50% stake in the project. This means that any new company may join the project only at the expense of Italian oil and gas giant Eni SpA, which has already ceded 10% to France's EdF. And now the Germans also have the pipeline in their sights. Surprisingly, Berlusconi did not object.
"I believe this is a completely positive development," the Italian prime minister replied without hesitation.
Berlusconi will have to martial all his influence because Eni does not want to share its slice of the pie with someone else. But analysts claim that the company should be more flexible, and with good reason.
"Eni won't be too insistent given that the parties involved in the South Stream project and its competitor, the Nabucco pipeline, have little confidence that they will be built," said Alor Invest analyst Dmitry Lyutyagin. "Additional investors would lower Eni's risk exposure. They have already failed to hold on to their 50% stake, so this is really just a matter of bargaining."
The prime ministers did not discuss a specific German company, but analysts have speculated on this point.
"Gazprom has recently been working in rather close partnership with Ruhrgas," said Grandis Capital analyst Timur Khairullin.
But the project faces various other problems.
"There are issues regarding the passage of the pipeline through some countries. I have learned that I will have to conduct negotiations with one country in order to convince it not to stand in the way of the project," Berlusconi said.
Anastasia Savinykh