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South Stream terminated

December 2, 2014

Russia has called off a major project to supply southern Europe with natural gas. The collapse of South Stream marks the latest casualty in Moscow's worsening relations with the West.

Bulgarien South Stream Pipeline

Russia cancelled construction of the South Stream gas pipeline on Monday, citing European obstructionism as the reason for halting the project, which was meant to supply southern Europe with natural gas.

The chief executive of Russia's Gazprom gas monopoly, Alexei Miller, told reporters that the project had been terminated after President Vladimir Putin said earlier in the day that Moscow would not continue to build the pipeline if Europe kept dragging its feet.

"The project is closed. This is it," Miller said with a tone of finality that sealed South Stream's fate as the latest casualty of the souring relations between Russia and the West over Moscow's role in the Ukraine crisis.

Gazprom was supposed to build the 2,400 kilometer-long (1,491 miles) pipeline across the Black Sea to provide gas to southern Europe via Bulgaria, thereby circumventing Ukraine.

It was going to cost $40 billion (32 billion euros) and be ready in 2016, but the project was beset by problems, most recently by Bulgaria's decision in June to indefinitely halt work on it under pressure from the European Union and the United States.

Die South Stream und Trans-Adriatic Pipelines ENG

"We see that obstacles are being set up to prevent its fulfillment," Putin said during an official visit to the Turkish capital Ankara. "If Europe does not want to carry it out, then it will not be carried out."

Putin suggested the government in Sofia was being pressured by the European Union, which relies on Russia for a third of its gas imports, a dependence the bloc is trying to curb.Putin said Gazprom had been unable to secure the necessary permissions to continue construction.

"If Bulgaria is deprived of the possibility of behaving like a sovereign state, let them demand the money for the lost profit from the European Commission," Putin said.

The European Commission has also said it did not want to support South Stream, as Gazprom would provide the gas as well as maintain the pipelines, giving it too much power.

Turkey visit

Putin was in Ankara to meet with Turkish President Recep Tayyip Erdogan, where the two leaders inked a deal to boost Russian gas exports to Turkey by 3 billion cubic meters. Putin also promised Erdogan a discount of 6 percent on gas future gas supplies. Last year, Turkey received 13.7 billion cubic meters of Russian gas.

Erdogan and Putin also agreed to triple their countries' bilateral trade volumes - a contentious move on the part of Turkey, a NATO member, as the Western military alliance and Moscow position themselves on different sides of the Ukraine conflict.

cjc/ng (Reuters, AFP, dpa)