Russia's Gazprom, frustrated by the failure of its plans to build a gas pipeline infrastructure to southeast Europe, has come up with a new plan to link the region via a pipeline under the Black Sea.
Faced with competition in southeast Europe from new supplies from Azerbaijan and LNG, Gazprom is moving to retain its market share in a region traditionally highly dependent on Russian gas flows through Ukraine.
Gazprom late Wednesday signed a memorandum of understanding with Greece's DEPA and Italy's Edison, outlining the interest of the three parties in a route for Russian gas via the Black Sea through third countries to Greece and Italy.
The companies said that work already carried out by DEPA and Edison on the ITGI Poseidon pipeline would form part of the project.
ITGI Poseidon is designed to link the Italian and Greek gas transmission systems through an 8 Bcm/year capacity offshore pipeline.
For Russia, finding a direct line to southeastern Europe has been a challenge, as first the 63 Bcm/year South Stream pipeline was scuppered for regulatory reasons and then the planned replacement line through Turkey -- TurkStream -- was suspended after Turkey shot down a Russian fighter jet in November last year.
"The development of intra-European gas transmission capacities is an important element in securing reliable supplies of gas, including Russian gas, to consumers across Europe," Gazprom CEO Alexei Miller said.
Edison CEO Marc Benayoun said the new pipeline would meet all the EU's regulatory requirements.
"The possible development of this new supply corridor, to be pursued in full accordance with EU legislations and regulations, will foster Italian security of supply and its role as a major southern European gas hub, in line with the National Energy Strategy objectives," he said.
DEPA CEO Theodoros Kitsakos added: "The revival of the ITGI-Poseidon project strengthens Europe's energy security with an additional supply corridor and further enhances Greece's role as a major gateway for gas from diversified sources and routes," he said.
Greece currently relies on Russia for around 60% of its gas needs -- in 2014 it imported 1.75 Bcm from Russia out of its total consumption of 2.9 Bcm.
Italy, meanwhile, imports around one third of its gas needs from Russia.
Other countries in southeast Europe are up to 100% dependent on Russia for their gas.
