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Gazprom absorbs South Stream partners' share following sudden ditching of subsea project

01st January 2015

Gazprom has acquired Eni, Wintershall and EDF’s minority interests (amounting to 50 per cent) in the South Stream Transport joint operating company over the New Year period, following a snap decision from Russian president Vladimir Putin to ditch the project in early December

Gazprom bought out Eni, Wintershall and EDF’s minority interests in the South Stream Transport joint operating company over the New Year period, following a snap decision from Russian president Vladimir Putin to ditch the project in early December
Relations between the EU and Russia have soured since the Ukraine crisis and the imposition of economic sanctions

Coming as a sad festive gift to itself amidst the strife of sanctions and energy price collapse, Gazprom and Eni announced the transaction of interest in the joint company on 29 December.

Eni has said that it will recover the capital invested to date in the project, calculated coherently with existing agreements.   

It comes as a somewhat muted end to a project that ambitiously sought to connect Russian gas fields to their European markets through a subsea pipeline below the Black Sea.

Relations between the EU and Russia have soured since the Ukraine crisis and the imposition of economic sanctions.

"If Europe does not want to carry out (South Stream), then it will not be carried out, We are now going to focus our energy resources in other directions," said Putin on 1 December in Ankara.

EU legislation to prevent gas suppliers from holding a monopoly over production, transmission and supply that came into force after agreements over the South Stream project were formed became a major barrier to the projects completion.

South Stream was Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic metres to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks.

The first gas delivery via South Stream was planned in late 2015.

Eni previously held a 20 per cent share in the company, with EDF and Wintershall holding 15 per cent each. 

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