Gazprom prepares for the worst with South Stream gas pipeline

MOSCOW, June 4 (UPI) --Russian energy company Gazprom it's ready for the "worst-case scenario" in terms of financing its South Stream gas pipeline for Europe, a top executive said.

Gazprom last month said it signed the necessary contracts needed to start construction of the onshore section of the pipeline later this year.

The company says lingering debt issues with Ukraine, through which the company sends most of its gas to Europe, are creating energy security risks and South Stream could address those problems. Some European officials, however, have said the pipeline would only make the region more dependent on Russian gas.

Alexander Medvedev, deputy chief executive officer at Gazprom, said the company is ready to start construction despite the opposition.

"If you ask me if I'm ready for the worst case scenario, I'd say 'Yes, we are ready,'" he said Tuesday.

A resolution passed in April by the European Parliament calls on members of the European Union to reconsider the pipeline.

Gazprom said the pipeline has an optimum capacity if 2.2 trillion cubic feet per year. First gas should run through the pipeline by late 2015 and it should reach peak capacity by 2018.

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