Gazprom has agreed to buyout its South Stream Transport partners Eni, Wintershall and EDF just weeks after the project, which was already in construction phase, was cancelled.
South Stream Transport was owned 50% by Gazprom, with Eni holding 20%, Wintershall 15% and EDF 15%. The joint venture company was set up to construct the offshore section of the South Stream gas pipeline.
Image: Saipem's Saipem 7000. Image from South Stream Transport BV.
Italian offshore contractor Saipem had mobilized for the first offshore pipelaying phase of the project, at Burgas port in Bulgaria, where pipe has been welded ready for laying. Almost 300 thousand tons of pipes had already been supplied for the first offshore string.
On December 1, Russian President Vladimir Putin announced the cancellation of South Stream, citing European Union opposition. Russia has been struggling with a weak ruble amid plunging prices as well as sanctions amid the country's involvement in the Ukranian crisis. Contractors Saipem and Allseas, which had been due to perform offshore pipelay works on the project, have confirmed contract cancellations.
The South Stream project was aimed at transporting Russian gas to southern European countries, whilst diversifying Russian natural gas supply routes.
South Stream’s offshore section was due to be 930km-long, running under the Black Sea through Russian, Bulgarian and Turkish zones, at times up to 2km deep. It was designed to transport up to 63 billion cubic meters. The onshore section would cross Bulgaria, Serbia, Hungary and Slovenia, terminating at the Tarvisio gas metering station in Italy. Gas branches from the main pipeline route were to be built to Croatia and to Republika Srpska (the state formation within Bosnia and Herzegovina).
The project history started in 2006, when Gazprom and Eni entered into the Strategic Partnership Agreement entitling Gazprom to supply Russian gas directly to the Italian market, starting from 2007. Under the Agreement, the existing contracts for Russian gas supplies to Italy were extended to 2035.
In October 2013 the first joint was welded at South Stream's Bulgarian section near the Rasovo CS site. First gas supplies via the South Stream gas pipeline were scheduled for late 2015.