The natural gas pipeline projects in southern Europe, South Stream and Nabucco, should combine to cut costs, Scaroni said. Eni is an equal partner in South Stream with OAO Gazprom, the world’s largest producer of gas. Nabucco shareholders include Austria’s OMV AG and Germany’s RWE AG.

“What we have here is what bankers call a strategic fit,” Scaroni said yesterday at a Cambridge Energy Research Associates conference in Houston. “Should all partners decide to merge the two pipelines for part of the route, we would reduce investments, operational costs and increase overall returns.”

Europe may need to import an extra 180 billion cubic meters of natural gas annually by 2020, stretching available supplies as China, India and Pacific member nations of the Organization for Economic Development and Cooperation seek more natural gas, Scaroni said.

Russia provides about 300 billion cubic feet of gas to Europe annually. Companies such as Germany’s E.ON Ruhrgas AG and GDF Suez SA of France purchase most of their gas from Gazprom and StatoilHydro ASA.

Discoveries of shale gas in the U.S. has freed up supply for the rest of the world, Scaroni said. New sources of gas from Africa or Turkmenistan and Kazakhstan would help satisfy demand in Europe, if pipeline connections could transport the gas to key markets, Scaroni said.

The South Stream would ship 63 billion cubic meters annually of natural gas from Russia and Central Asia to Europe under the Black Sea. Nabucco would deliver 31 billion cubic meters annually from eastern Turkey to Austria.

Source: www.bloomberg.com/Europe-Needs-to-Push-Gas-Infrastructure-Spending-Scaroni-Says