Russia’s gas giant Gazprom said in a release on Monday it had signed a deal with Eni, Wintershall and EDF on the purchase of 50% of shares in South Stream Transport BV. Thus, Gazprom will be a 100% owner of the company.
Commenting on the decision to sell its stake in South Stream Transport BV, Wintershall said participants in the project had decided to close it since there were no guarantee permits for the South Stream further construction could be issued soon whereas economic impacts of delays in the project implementation could hardly be calculated.
South Stream Transport B.V. is an international joint venture set up to do the planning and construction works and to operate the seabed South Stream pipeline that was supposed to be laid across the Black Sea. Gazprom’s share in the company was 50%, Italy’s Eni held a 20% stake, France’s EDF - 15% and Germany’s Wintershall Holding GmbH - also 15%.
Russian President Vladimir Putin announced the decision on Russia’s withdrawal from the project on December 1 while on visit to Turkey. South Stream was Gazprom’s global infrastructural project of a gas pipeline system with a capacity of 63 billion cubic meters across the Black Sea stretching from Russia to Bulgaria and through Serbia, Hungary and Slovenia further to Austria.
Vladimir Putin blamed the EU and Bulgarian authorities for lack of cooperation. According to the South Stream Transport Company, European companies will suffer direct losses valued at no less than €2.5 billion due to the termination of the project.
Instead of South Stream, Gazprom will build a gas hub on the Turkey-Greece border under a new 63 billion cubic meter pipeline project. Gazprom CEO Alexey Miller said the construction of a gas pipeline to Turkey will make it possible to reduce the risks linked with natural gas transit through Ukraine. Russia’s steel pipe manufacturers hope that all their products originally meant for the South Stream project will be redirected to the new gas pipeline project.