The Blue Stream pipeline is the largest Russian-Turkish joint energy project to date, which carries Russian natural gas to Turkey. The $3.2 billion pipeline transported 5 billion cubic meters of natural gas in 2005, and is expected to carry 16 billion cubic meters annually by 2010.

Alexei Miller said during a meeting with President Vladimir Putin that a consortium has been established with Hungary’s MOL Group, and a feasibility study for the project will be worked out by the end of the year.

Miller said natural gas supplies are supposed to transit through Turkey toward Greece, Italy and, perhaps, Israel. Supplies to Bulgaria, Romania, Hungary and Austria are also under consideration.

“We are considering the construction of a sea pipeline from Turkey to Israel, and the Israeli side must make a final decision on the purchase of Russian gas,” Miller said.

Gazprom and MOL Group, a leading integrated group of oil and gas companies in Central and Eastern Europe, signed an agreement June 21 to establish a company on a parity basis to implement gas projects in Hungary.

Gazprom spokesman Sergei Kupriyanov said at the time the project, called the South European Pipeline, aimed to create new transnational gas transportation capacities and an underground gas storage facility in Hungary.

“The project aims to create a new system to transport gas from Russia and third countries to European markets,” Kupriyanov said, adding that the Blue Stream pipeline under the Black Sea can be used to implement the project.

Kupriyanov also said the diversification of gas routes was a common element in Russia’s and Europe’s energy strategies.

“Considering Gazprom’s resource base, the existing portfolio of contracts and the prospects for concluding new export contracts, this is the only realistic project for gas deliveries to southeast Europe. Hungary is a key point for such projects,” Kupriyanov said.