Eric Watkins
Senior Correspondent
LOS ANGELES, Dec. 3 -- Russia's OAO Gazprom and Eni SPA of Italy signed an agreement to build the projected 560-mile South Stream gas pipeline under the Black Sea and through Bulgaria.
The agreement, seen by both sides as a strategic development in the supply of energy to Europe, was signed as part of Italian Prime Minister Romano Prodi's visit to Russia for talks with President Vladimir Putin.
"Russia and Europe are interdependent. Europe needs Russia and Russian needs Europe," said Prodi, who added, "We need to move as quickly as possible toward a strategic partnership."
"The South Stream project is of strategic importance for Europe's energy security," Putin said. "It is being implemented based on principles of transparency and taking into account interests of energy suppliers and consumers," he said.
Officials from Gazprom and Eni signed the agreement to establish 50:50 joint venture to develop a marketing and feasibility study for the pipeline.
On completion, the $10 billion line eventually could distribute gas to northern and southern Europe, with an estimated annual capacity of 30 billion cu m.
"The new pipeline system, which complies with the strictest technological and environmental criteria, will significantly improve the security of supply of the whole of Europe," Eni CEO Paolo Scaroni said.
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