Monday, December 1, 2014

Russia Scraps South Stream Gas Project: Gazprom

Russia cancels the South Stream gas pipeline project under the European Commission's pressure, the Gazprom CEO said Monday.
December 1, 2014. Russian President Vladimir Putin takes part in the fifth meeting of the High-Level Russian-Turkish Cooperation Council in Ankara.

 Russia is scrapping its much-touted South Stream gas pipeline project due to EU opposition to it and has no plans to revive it, Gazprom CEO Alexey Miller said Monday.
"The project is closed. This is it," Miller, who accompanies Russian President Vladimir Putin on an official visit to Turkey, told reporters in Ankara.

The European Commission has taken a critical stance on the project, which bypasses Ukraine, claiming that construction of the pipeline violated the EU Third Energy Package. According to the package, it is illegal to own a pipeline and produce the natural gas that flows through it at the same time. Moscow has insisted that the construction of the pipeline does not contradict the regulations.

Gazprom Plans to Build New Black Sea Gas Pipeline to Turkey

Gazprom will set up a legal entity for construction of a new pipeline with annual capacity of 63 billion cubic meters to deliver Russian natural gas to Turkey and customers in Southern Europe, Alexey Miller added.

Russian Energy Minister Alexander Novak

"Gazprom and [Turkey's] Botas company signed today a memorandum of understanding on the construction of a Black Sea gas pipeline to Turkey with annual capacity of 63 bln cubic meters," Miller, told reporters.

"A total of 14 bln cubic meters will be supplied to Turkey…while the rest will be pumped to a hub on the Turkish-Greek border [to be delivered to customers in Southern Europe]," Miller said.

While the pipeline will be registered as a Russian company, Miller said that Gazprom will “consider offers from Turkish partners if they express an interest in buying into [the project].”

Earlier on Monday, Russian President Vladimir Putin said that Russia would soon increase gas deliveries to Turkey by three billion cubic meters a year via the Blue Stream, an already operating pipeline running across the Black sea, following the request from Turkish authorities in light of the country's growing energy needs.

Putin added that Russia would create an additional gas hub in Turkey, on the border with Greece, for the gas consumers in Southern Europe.

Gazprom announced the construction of a pipeline across the Black Sea to reduce the possibility of unreliable Russian gas passage to central and southern Europe through Ukraine in 2012. South Stream was expected to be fully operational by 2018.

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