It's getting cold in Europe...

[Sarmatian]

I read that the South Stream pipeline would go from the Russian Black Sea coast across the seabed to Bulgaria, there to bifurcate into a southern branch toward Greece and Italy and a northern branch toward Serbia, Hungary, and Austria. In addition, Russia has proposed to extend this structure to many other countries along those routes.

Now, even if the South Stream project implies the diversion of significant gas volumes from Ukrainian pipelines, I think it is very difficult for Gazprom to satisfy all those potential customer countries along South Stream routes. There are prospects of important gas shortfalls for Russia, relative to its multiple, and growing, internal and external supply commitments from a stagnant production. Shortfalls are expected right when the South Stream becomes operational. After two decades of underinvestment in exploration and production (while over investing in other areas), Gazprom can only hope for large-scale production from new fields in Yamal (Siberia) in the latter part of the next decade.

That's about right, although Italy will have two entry points. One from the south, from Greece and the other one will go through Slovenia to northern Italy.

It won't be just Russian gas, it will be also gas from several countries around Caspian Lake. I don't expect project to be finished before 2012-13 and then it'll take several years to build it. I think it will be finished in the latter part of the next decade, 2015-2020, somewhere in that period.

It isn't overly important how many countries will there be connected in the South Stream. Balkan countries are small in population and their economies are also small, they're not going to consume much gas. Even if you put Croatia, Bosnia, Macedonia, whatever-Balkan-country it won't change things so much. Germany consumes more gas than all Balkan countries put together. The only large consumer would be Italy, which also import gas from other sources...