Russia scraps South Stream

imgRussian president Vladimir Putin says that the US$50bn South Stream gas pipeline has been scrapped in favour of a new route through Turkey.

Putin blamed the cancellation of the project – which would have seen a pipe constructed along a route through Bulgaria, Serbia and Hungary- on opposition from within the EU. The bloc, which has been keen to reduce its energy dependence on Russia, raised fears that EU competition rules could block project leader Gazprom from being be both a gas producer and pipeline owner.

“We believe that in the current conditions Russia cannot continue with the realisation of this project,” Putin told reporters. “If Europe does not want to carry out [South Stream], then it will not be carried out. We are now going to focus our energy resources in other directions.”

Construction work on the 930km pipeline began just over a year ago, but was suspended in June after the European Commission raised its competition concerns. However, Russian officials claim that the move to shut down work was purely a political decision on Europe’s part as tensions continue to rise between EU and Russia over the ongoing conflict in Ukraine.

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