The new department will manage the construction of the offshore section of the pipeline; the expansion of transmission capacity in Russia, which will be required to ensure gas delivery from the unified gas supply system; and, the upgrading of existing gas transmission infrastructure as well as the construction of new facilities in countries participating in the project.

Former Gazprom Director General Leonid Chugunov has been appointed to head the department, which will report directly to Gazprom Management Committee Chairman Alexey Miller.

In addition, local news sources have reported that Russia has secured approval from Turkey to build the South Stream Pipeline under the Black Sea. The breakthrough came during talks in Moscow between Russian Prime Minister Vladimir Putin and Turkish Prime Minister Recep Tayyip Erdogan.

Both leaders pledged to finalise approvals for the pipeline project before November 2010, when construction is expected to begin.

With a capacity of 63 Bcm/a, the 900 km South Stream Pipeline will deliver gas from Russia and Central Asia to Europe, via the Black Sea. The pipeline is expected to cost between $US28–36 billion and is planned to become operational in 2015.

Meanwhile senior Gazprom management committee members have met with Russian pipe manufacturers at the company’s headquarters in Moscow to discuss the supply of pipe products for large pipeline projects to be constructed before 2012.

Particular projects discussed at the meeting included the construction of the Bovanenkovo – Ukhta Gas Trunkline System, the Sakhalin – Khabarovsk – Vladivostok Gas Transmission System, the Gryazovets – Wyborg Pipeline, Pochinki – Gryazovets Pipeline and the Dzhubga – Lazarevskoye – Sochi Pipeline.

Representatives from the Pipe Metallurgical Company, United Metallurgical Company, Severstal, Magnitogorsk Iron & Steel Works, CHTPZ Group and Pipe Manfacturers Association attended the meeting with Gazprom Head of Gas Transportation, Underground Storage and Utilisation Oleg Aksyutin, Head of Investment and Construction Yaroslav Golko, and meeting chair Alexander Ananenkov.

The attendees gathered to discuss issues related to the process of planning and arranging supplies for domestically manufactured large diameter pipes over the next three years, with special attention paid to the timely delivery of pipes for top priority gas transmission projects across Russia.

Pipe manufacturers provided Gazprom with information on future production development plans, and noted that the company’s orientation toward the procurement of domestically supplied pipes would provide considerable support to the Russian pipe supply industry.