Yesterday Vladimir Putin said that the south stream pipeline project was under threat over obstacles raised by the EU. He was joined later by Gazprom’s CEO saying that “The project is closed, this is it”. Austria’s econ minister has said today that he has not received any official confirmation.
There’s been a lot of money pumped into the $40bn project on both sides and Romania’s OMV CEO said that they were due to invest €100m into it over the next three years.
Earlier this year the EU investigated the tender process in Bulgaria calling a halt to work while that was carried out and they have also frozen the approval process over the Ukraine crisis.
The pipeline is obviously a big political pawn between Russia and Europe and it’s halt is going to damage both sides. If it is confirmed there will be an economic to those countries directly involved and to Europe overall. It’s also possibly one final step before Russia starts raising the spectre of bringing gas supplies into the political arena, especially as we hit winter.
We’re not at that point yet and Russia is playing ball with Ukraine over gas supplies as they announce that they may deliver gas to Ukraine 2 days after Ukraine’s pre-payment. The big word here though is “may”.