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News 21 Jan 16

Russia Formally Terminates South Stream Pipeline

Gazprom has formally closed the project that President Putin effectively killed off in late 2014 – in which Serbia invested money and hopes.

Photo by: Ohikulkija

Russian energy giant Gazprom on Wednesday hammered the final nail in to the coffin of the South Stream pipeline, a once ambitious project designed to connect Russia with Central and Southeast Europe, saying that the agreement on the South Stream gas pipeline project had been terminated.

“The company’s board of directors approved the agreements concluded by Gazprom with South Stream Transport B.V. on termination of the contract of suretyship regarding obligations of Gazprom Export on the gas transportation agreement from October 2, 2013,” the Russian company said.

While Gazprom officially closed the project on Wednesday, the deal has been off since late 2014, when Russian President Vladimir Putin said that the south Stream could not be built in opposition to sustained pressure from the EU.

The South Stream was projected to carry Russian gas under the Black Sea and through Bulgaria, Serbia and Hungary to the EU.

Serbia stands to lose the 30 million euro it invested in the South Stream project. The overall value of the project was estimated at some 16 billion euro.

The Kremlin-controlled energy giant meets about a third of European gas needs. Its exports to the European Union and Turkey rose by 8 per cent last year due to falling prices.

In March 2014, the EU imposed restrictive measures against Russia in response to Russia’s annexation of Crimea and the Kremlin’s meddling in Ukraine’s internal affairs in support of pro-Russian separatists.

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