Saipem Rises After Signing South Stream Pipe Accord With Gazprom
Saipem SpA, Italy’s largest oil-service provider, rose the most in a week in Milan trading after signing a 2 billion-euro ($2.8 billion) contract to build the first link in the South Stream natural gas pipeline to Europe.
Saipem climbed as much as 2 percent, the biggest intraday gain since March 4, and traded up 1.4 percent at 17.03 euros as of 3:02 p.m. local time. Construction of the subsea pipeline is due to begin in the European autumn, according to an e-mailed statement from Moscow-based OAO Gazprom, leading the project.
Russia is developing the link to send gas to Europe while bypassing Ukraine, avoiding a repeat of fuel cutoffs that curbed supplies twice since 2006 amid pricing disputes with its former Soviet neighbor. Energy concerns have arisen again this month following the ouster of Kremlin-backed Ukraine President Viktor Yanukovych, sparking a move by pro-Russian forces into Crimea.
South Stream’s first link, scheduled for completion by the end of 2015, will carry about 15 billion cubic meters of gas a year, according to Gazprom. Eni SpA (ENI), Wintershall AG and Electricite de France SA are also partners in the project.
The tender for a contractor to lay a second link is under way, Sergei Kupriyanov, a Gazprom spokesman, said by telephone, declining to give a deadline. Saipem, which has previously worked on Gazprom’s Blue Stream and Nord Stream subsea pipes, is the favorite to win that contract, Valery Nesterov, an oil and gas analyst at Sberbank CIB, said by phone.
