Saipem reports that it has received notice that its client, South Stream Transport BV, which is controlled by Gazprom, is lifting the suspension of work under the contracts, and that Saipem should commence work on the offshore pipeline in the Black Sea…again.
The project had been commenced, then delayed, then halted, and now has been reactivated. Saipem was asked by Gazprom to start work on the pipeline under the Black Sea just months after being forced to halt work on another project for the Russian energy giant.
Last year, Saipem won contracts from Gazprom worth US$2.7 billion to build a stretch of the South Stream pipeline to carry gas from Russia to Bulgaria. However, the company had to stop work when the project was halted due to the European Union’s imposed sanctions on Moscow. Gazprom has since reported that it will build an alternative pipeline, to be known as Turkish Stream, which will be built under the Black Sea to move gas to Turkey. Previously, Gazprom planned to start building the Turkish Stream pipeline and Saipem was expected to win contracts on the Turkish Stream project if it went through.
The South Stream pipeline under the Black Sea is the offshore component of the South Stream Pipeline System. The 931km-long South Stream offshore pipeline will connect the world’s largest natural gas reserves in Russia with consumers in the European Union. The pipeline will originate on the Russian Black Sea shore in the area of Anapa, cross the Turkish Exclusive Economic Zone in the Black Sea, and land on the Bulgarian coast near Varna. Commercial operations were previously scheduled to start by yearend 2015. When fully operational, the South Stream offshore pipeline will consist of four pipeline sections to move about 63 Bcm per year.
Image courtesy of Samuel Baily