Consent given to start onshore construction of South Stream pipeline

The consortium managing the planned South Stream natural gas pipeline said Tuesday it's been approved to start construction in Russian territory.

"The Russian Ministry of Construction, Housing and Utilities has issued the construction permit for the Russian sector of the South Stream offshore pipeline," the group said in a statement. "In accordance with the permit, South Stream Transport can start onshore construction activities for the project in Russia."

Offshore, South Stream would run across the Black Sea to southern European countries. On the Russian shore, the program calls for the construction of underground pipelines that would connect to the gas transit network in Russia.

The consortium, which has headquarters in Amsterdam, said a special permit is needed from the Russian government for offshore pipeline construction. That's expected later this year.

South Stream is meant to add a layer of diversity to Russia's natural gas export options. Russia sends the bulk of its gas through a Ukrainian transit system, though that route is susceptible to geopolitical risks.

"Pipe laying in Russian waters is scheduled to start in November 2014, after receiving the pipe-laying permit from the Ministry of Natural Resources and Ecology," the group said. "The first pipeline is to be ready for operations by the end of 2015."