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South Stream: spats over the gas pipes

Russia has abandoned its plans to build the new South Stream gas pipeline through Bulgaria.

Russia said that it has abandoned plans for a new gas pipeline to Europe through Bulgaria, following opposition by the European Union. The $20bn South Stream pipeline, funded by Russia's state gas giant Gazprom, was to run under the Black Sea to southern and central Europe.

The pipeline was intended to bypass Ukraine by sending gas through Bulgaria, but the European Commission said the pipeline needs to conform to European competition rules and pressured Bulgaria not to back the project.

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"We see that obstacles are being set up to prevent its fulfilment," said Russian president Vladimir Putin at a joint press conference with the Turkish president, Recep Tayyip Erdogan.

Instead, Putin said Russia will look to create a gas hub on the Turkish-Greek border to compensate for the loss of South Stream. "We will re-concentrate our energy resources on other regions of the world," said Putin.

"We will work with other markets and Europe will not receive this gas, at least not from Russia," he added.

What the commentators said

EU and US sanctions on Russia following the country's intervention in Ukraine has led to a game of political brinkmanship between Russia and the West.

Although Gazprom has not been targeted by the EU and US, the South Stream project "struggled to raise financing for the €14bn offshore section of the pipeline due to Western sanctions on Russia that have made European banks cautious about lending to a Gazprom-led consortium".

That assessment was probably accurate, suggested Mikhail Krutikhin, a Russian energy analyst, quoted in The Guardian. By sending gas through Bulgaria, Russia's plan was to punish Ukraine further by cutting it off from gas flows. "From the beginning this was a political project... it was never economical to spend so much on this pipeline."

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