South Stream
December 02, 2014
TheSrpskaTimes

Russia on Monday scrapped the South Stream pipeline project to supply gas to southern Europe without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline, with a promise of hefty discounts.

The EU, at loggerheads with Moscow over Ukraine, and keen to reduce its energy dependence on Russia, had objected to the $40 billion South Stream pipeline, which was to enter the EU via Bulgaria, on competition grounds.

The proposed undersea pipeline to Turkey, with an annual capacity of 63 billion cubic metres (bcm), more than four times Turkey’s annual purchases from Russia, would face no such problems. Russia offered to combine it with a gas hub at the EU’s southeastern edge, the Turkish-Greek border, to supply southern Europe.

Alexei Miller, the chief executive of Russia’s state-controlled gas exporter Gazprom (GAZP.MM), told reporters in Ankara, where he was on a one-day visit with President Vladimir Putin, that South Stream was “closed. This is it”.

Putin accused the EU of denying Bulgaria, heavily dependent on Russian gas, its sovereign rights, and said that blocking the project “is against Europe’s economic interests and is causing damage”.

Putin’s plan has stunned the Serbian PM Aleksandar Vucic who said on Tuesday that this is “not good news for Serbia”.

According to Vucic, who spoke for Serbia’s public broadcaster RTS, Serbia “in no way contributed to the decision.”

“We have been investing in the South Stream for seven years and we in no way contributed to that decisions, it is obvious that we are suffering because of a clash between big (countries),” he said.

The President of Republika Srpska, Milorad Dodik, also expressed his shock stating for local media that Putin’s decision is “not permanent, I’m sure”.

He blames the EU for pushing Russia to abandon the South Stream gas pipeline and added that this is a huge problem for Srpska as it is “loosing a 2 billion EUR investment and we can not influence the decision”.