Putin says will not build South Stream gas pipeline

BRUSSELS - Russian leader Vladimir Putin i has announced that he will no longer build the South Stream gas pipeline due to EU opposition.

He made the announcement in Ankara on Monday (1 December) at a press briefing with Turkish leader Recep Tayyip Erdogan i.

“We believe that in the current conditions Russia cannot continue with the realisation of this project [South Stream],” Putin said.

“Bearing in mind that you need to construct the pipeline under the Black Sea, we cannot begin construction so long as we do not have permission from Bulgaria. To begin construction in the sea, get to the Bulgarian beach, then stop - it would be ridiculous”.

“The position of the European Commission was not constructive … If Europe does not want to realise it, well, then, it won’t be realised”, he added.

The pipeline was to bring Russian gas to Austria and Italy via the Black Sea, Bulgaria, Serbia, and Hungary from 2016.

In strategic terms, it was to increase EU dependence on Russian energy and boost Russian influence in participating states.

It would also have undermined Ukraine by bypassing its gas transit system.

But the European Commission threatened to launch legal action on grounds that South Stream violates EU anti-monopoly laws, with Bulgaria halting construction in August.

Putin said that his decision will cost the EU.

He noted that the South Stream consortium - which includes French, German, and Italian firms - has already spent “hundreds of millions of dollars” on the project.

He added that Germany, which agreed to build the Nord Stream pipeline under the Baltic Sea, now benefits from some of the lowest gas prices in Europe.

He also urged Bulgaria to seek compensation for lost revenues.

“If Bulgaria is prevented from behaving as a sovereign state, then at least let them ask for money from the European Commission for lost savings - the direct budget revenues that Bulgaria would have had from [gas] transit were at least €400 million a year.”

The death of South Stream will make it easier for the EU to construct its alternative - the so-called Tanap gas pipeline from Azerbaijan via Turkey to the EU.

New Putin-Erdogan axis?

But Putin on Monday also announced a new energy partnership with Turkey, amid EU concern over Erdogan’s future loyalties.

The Russian leader said he will add an extra line to his existing Blue Stream gas pipeline to Turkey and build a new storage “hub” on the Turkish-Greek border to supply gas to south-east Europe.

The two leaders also noted that plans for Russian firm Rosatom to build a $20 billion nuclear power plant in Turkey are proceeding full speed ahead.

For his part, Erdogan urged Putin to give better treatment to Crimean Tatars, a Turkic minority.

Russia annexed Crimea in March and launched a crackdown on the Tatar minority, which opposes Russian rule.

But the Turkish leader took a soft line on Russia’s war on Ukraine. Referring to Putin as his “dear friend”, he said only that the conflict must “be resolved within the framework of international law”.

Erdogan also complained that Europe is not doing enough to help him with the Syrian refugee crisis.

He noted that Turkey has spent $5 billion on helping the 1.6 million Syrians who fled across the border.

“So, what support has come to us from around the world? I tell you: $200 million dollars. How many asylum seekers has all of Europe taken in? Dear friends: 130,000”.