Oil Report

Slovenia to sign South Stream deal on Saturday

LJUBLJANA, Nov 9 (Reuters) - Slovenia expects to sign a deal on Saturday ensuring its participation in the South Stream pipeline that will transport Russian gas to Europe, the economy ministry said.

“The deal has been reached and the agreement is expected to be signed on Saturday,” ministry spokesman Gregor Resman told Reuters on Monday.

Under the deal, which is to be signed by Slovenian Prime Minister Borut Pahor and his Russian counterpart Vladimir Putin in Moscow, the pipeline will run through Slovenia.

It will transport gas under the Black Sea, skirting Ukraine, and is intended also to cross Bulgaria, Serbia, Hungary, Greece, Austria and Italy.

Disputes over payments between Russia and Ukraine, through which most of Russia’s gas exports to European markets now flow, have caused disruptions and gas shortages in Europe during recent winters.

The pipeline, which is expected to become operational in 2015, will have a capacity of up to 63 billion cubic metres per year and will be built by Russian gas export monopoly Gazprom GAZP.MM and Italy's oil major Eni ENI.MI.

Slovenia had said in the past it also supports the Western-backed Nabucco pipeline project, which would take gas from Central Asia and the Caspian Sea and bypass Russia entirely. (Reporting by Marja Novak; Editing by Zoran Radosavljevic and Anthony Barker)