Italy and Greece have set up a joint venture for the construction of a gas pipeline between the two countries, with a transport capacity of 8 billion cubic meters a year, Greece's monopoly natural gas provider DEPA said Wednesday.
"The agreement to establish IGI Poseidon SA, the company which will design, develop and manage (the) Greece-Italy natural gas pipeline, was signed today in Athens," DEPA said in a joint statement with Italian power company Edison (EDN.MI).
The pipeline will run 200 kilometers under the sea between the Greek coast and the coast of Apulia. IGI Poseidon will be a 50-50 joint venture of Edison International Holding and Depa, Greece's government-owned hydrocarbon company.
Under the agreement, Depa will appoint its current Chairman, Assimakis Papageorgiou, as Chairman of IGI Poseidon and Edison will appoint Edison's Senior Vice-president of Development and Chairman of Edison Hellas, Roberto Poti, as Chief Executive Officer.
Poti said construction of the pipeline will start in 2009, once the gas supply contracts have been signed, with completion scheduled for 2012.
An initial agreement signed by Italy and Greece in 2005 was later followed by one signed by Italy, Greece and Turkey in July 2007 and by one between Italy and Azerbaijan in December of the same year for the transit corridor to transport natural gas from the Caspian Basin by way of Turkey and Greece, which share a pipeline connection since November 2007.
In a separate statement, the Italian power company said Edison and Depa have begun negotiations with upstream companies operating in Azerbaijan to secure natural gas supplies for the new pipeline, in the construction of which the two companies will invest about EUR500 million. Some 80% of the transmission capacity will be reserved for Edison, with Depa taking up the remaining 20%.