Turkish Stream May Extend to Austria via Balkan Route

Greece, Hungary, Macedonia and Serbia may sign a memorandum on the construction of a gas pipeline from Turkey to Austria in the autumn, Vedomosti reported on Wednesday, citing a participant in the project

The foreign ministers of the four countries are expected to meet in September to take a decision on preparations for a feasibility study, an official of Hungarian gas company FGSZ has confirmed to the the Russian newspaper.

An official of Hungary's foreign ministry said the planned pipeline has been called Tesla and the first meeting of the working group in charge of drafting the project has taken place on 25 June, according to Vedomosti.

The Tesla pipeline will be an extension of the Turkish Stream pipeline proposed by Russia's Gazprom to carry Russian natural gas to Turkey beneath the Black Sea. A planned gas hub at Turkey's border with Greece will enable the potential transit of Russian gas to southern and central Europe.

The Tesla pipeline project, with an annual capacity of 27 billion cubic meters (bcm), is expected to be finalized by 2019, if approved by all participants. The pipeline would pass through Greece, Macedonia, Serbia and Hungary to eventually reach the Baumgarten gas hub near Vienna. Its length will be 1,300-1,400 km. Preliminary estimates put its cost at EUR 4-5B, Vedomosti said.

A final investment decision is expected to be made in the first quarter of next year. Construction works are planned to start a year later.

A extension of the pipeline to Italy from Greece might also be built, according to a source close to the Greek side in the negotiations. In this case the capacity of the pipeline on Greek territory should be increased by 15 bcm of gas which Italy would receive through Tesla.

According to a...