Russian state gas monopoly Gazprom has announced the signing of a deal with Eni, Wintershall and EDF for the purchase of 50 percent of shares in South Stream Transport BV. Thus, Gazprom will become owner of 100 percent of the company.
Commenting on the decision to sell its stake in South Stream Transport BV, Wintershall said the participants in the project had decided to close it since there was no guarantee permits for further construction on the South Stream project would be issued soon, while it was difficult to calculate the economic impacts of delays in the project implementation.
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 percent, Italy's Eni held a 20 percent stake, France-based EDF held 15 percent, and Germany's Wintershall Holding GmbH also had a 15 percent stake.
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 international infrastructural project for 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.