Gazprom Cancels Turkish Stream Pipeline Contract with Italy's Saipem

Gazprom subsidiary South Stream Transport BV has suspended a contract with Italy's Saipem SpA for the construction of the first line of the offshore section of the Turkish Stream gas pipeline.

The cancellation notice sent to the Italian oil and gas industry contractor cited the failure to reach agreement on a number of issues related to the implementation of the Turkish Stream project, according to reports of Interfax.

According to the media statement, other activities related to the implementation of the project continue, with South Stream Transport BV set to begin talks soon with potential contractors for the laying of the first line of the Turkish Stream pipeline.

Russia expects to sign an intergovernmental agreement with Turkey on the project by end-June.

According to Gazprom's preliminary estimates, the first line of Turkish Stream will cost EUR 3.3 B.

Russian President Vladimir Putin announced in December 2014 the decision to quit the South Stream pipeline project due to clashes with EU law.

Gazprom decided to redirect the pipeline to Turkey.