Gazprom pipelines and export capacity

Газопроводы Газпрома и экспортные мощности

Gas pipelines of West Siberia

Газопроводы Западной Сибири

Export flows of Gazprom

Экспортные потоки

Spot, Gazprom, Brent

Цены на нефть и газ

End-use price of gas

Russia and USA

Daily gas production

Суточная добыча

Full cost of the South Stream project to exceed 50 Billion

Gazprom plans to spend Rub 510 Billion (12.5 Bn, $17.0 Bn) on its Southern Corridor project designed to supply gas to the South Stream pipeline. The Southern Corridor will be fed via the Bovanenkovo-Ukhta-Pochinki pipeline route, a part of the Yamal Megaproject. The Pochinki compressor station is the end point of the Ukhta-Pochinki pipeline and the start point of the Southern Corridor.

Based on the officially published project costs, the cost of the Bovanenkovo-Pochinki link can be estimated at Rub 750 Billion (18.5 Bn, $25.0 Bn) at the lowest. Gazprom prefers to consider this investment as a part of the overall system expense. This way about two-thirds of the capital expenses can be allocated to the cost of supply of Russian consumers, which would make it easier to lobby for higher price of gas in Russia. However, without the South Stream pipeline, both the Southern Corridor and the Bovanenkovo-Ukhta-Pochinki projects are not needed. Note that having the South Stream project, Gazprom could deliver the required volumes of gas to Pochinki via a short link from Bovanenkovo to Yamburg and the existing pipelines of West Siberia.

Therefore, the total cost of the South Stream project with its feeding pipelines and the financing expenses is to exceed 50 Billion or $65 Billion. Out of the total, about 40 Billion ($52 Bn) will be paid by Gazprom and the rest by its foreign partners. Notably, this investment will increase the gas transmission costs and reduce profits of the shareholders of Gazprom.

The map in PDF format can be downloaded from here.

Same as with other Russian pipelines built after 2005, cost estimates for 1 km of Southern Corridor are 2-2.5 times higher than for similar pipelines in the European Union. The table below compares construction costs (including compressor stations) for selected 56-in pipelines.

 Pipeline name  Project, country   Diameter, mm   /km, Million
 Southern Corridor  South Stream, Russia 1420 5.0
 Gryazovets-Vyborg-1  Nord Stream, Russia 1420 4.9
 Gryazovets-Vyborg-2 (looping system)  Nord Stream, Russia 1420 3.5
 OPAL  Nord Stream, Germany  1420 2.1
 NEL  Nord Stream, Germany  1420 2.3
 Gazelle  Nord Stream, Czech  1420 2.4

High cost of the Southern Corridor pipelines can not be explained by  climatic, geographic or terrain conditions of Southern European Russia.

Mikhail Korchemkin

East European Gas Analysis

Malvern, PA, USA


January 31, 2013


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Last modified: 12/07/14                    East European Gas Analysis 2006-2014                                           Email:
Reproduction or use of materials is allowed only with reference to East European Gas Analysis or