South Stream

South Stream was a proposed offshore natural gas pipeline that would have transported Russian gas across the Black Sea to Europe, bypassing Ukraine. The project was initiated by Gazprom and supported by Vladimir Putin, Dmitry Medvedev, and other high-ranking Russian officials, including Igor Sechin and Alexei Miller. The pipeline was intended to increase Russia's energy exports to Europe, particularly to countries such as Germany, Italy, and France, which are major consumers of Russian gas, with companies like E.ON, Enel, and GDF SUEZ playing important roles.

Background and history

The concept of the South Stream pipeline dates back to the early 2000s, when Gazprom and Eni signed a memorandum of understanding to explore the possibility of building a gas pipeline from Russia to Europe. The project gained momentum in the late 2000s, with Russia and Italy signing an agreement to cooperate on the project, and Bulgaria, Serbia, and Hungary also expressing interest in participating. The pipeline was expected to be built in collaboration with companies like Saipem, Technip, and Allseas, and would have required the construction of new infrastructure, including compressor stations and gas processing facilities, with support from Siemens, Alstom, and General Electric. The project was also seen as a way to reduce Russia's dependence on Ukraine as a transit country for its gas exports, following disputes between Gazprom and Naftogaz over gas prices and transit fees, which involved Viktor Yanukovych, Yulia Tymoshenko, and other Ukrainian politicians.

Project description

The proposed South Stream pipeline would have had a total length of approximately 925 kilometers, with a capacity to transport up to 63 billion cubic meters of gas per year. The pipeline would have started in Anapa, Russia, and would have crossed the Black Sea to reach the coast of Bulgaria, from where it would have continued onshore to Serbia, Hungary, and eventually Austria and Italy. The project would have required the construction of several compressor stations, including ones in Russia, Bulgaria, and Serbia, and would have involved companies like Cameron International, National Oilwell Varco, and Weatherford International. The pipeline would have also required the development of new gas processing facilities, including ones in Russia and Italy, with support from Shell, ExxonMobil, and Total S.A..

Participants and stakeholders

The South Stream project involved a number of participants and stakeholders, including Gazprom, Eni, EDF, and Wintershall, which were the main shareholders of the project. Other companies, such as Saipem, Technip, and Allseas, were also involved in the project as contractors and suppliers. The project also had the support of several European governments, including those of Italy, Bulgaria, Serbia, and Hungary, with leaders like Silvio Berlusconi, Boiko Borisov, Boris Tadić, and Viktor Orbán playing important roles. However, the project was also opposed by some European countries, including Poland and Lithuania, which were concerned about the potential impact of the pipeline on the region's energy security, with politicians like Donald Tusk and Dalia Grybauskaitė expressing their concerns.

Political and economic implications

The South Stream project had significant political and economic implications for Europe and Russia. The project was seen as a way for Russia to increase its energy exports to Europe and to reduce its dependence on Ukraine as a transit country. The project was also expected to have a significant impact on the European gas market, with the potential to increase competition and reduce prices, benefiting companies like RWE, E.ON, and Enel. However, the project was also opposed by some European countries, which were concerned about the potential impact of the pipeline on the region's energy security and the potential for Russia to use its energy exports as a political tool, with the European Commission and the European Parliament playing important roles in shaping the European Union's energy policy. The project was also seen as a way for Russia to strengthen its relationships with European countries, particularly those in Southern Europe, with leaders like Angela Merkel, François Hollande, and Mariano Rajoy playing important roles.

Cancellation and aftermath

In December 2014, Vladimir Putin announced that the South Stream project would be cancelled, citing the lack of support from European countries and the opposition from the European Commission. The cancellation of the project was seen as a significant blow to Russia's energy export plans and its relationships with European countries. The project's cancellation also had significant implications for the companies involved, including Gazprom, Eni, and EDF, which had invested significant resources in the project, with Alexei Miller, Paolo Scaroni, and Henri Proglio commenting on the project's cancellation. The cancellation of the South Stream project also led to the development of alternative pipeline projects, including the TurkStream pipeline, which was announced by Vladimir Putin in 2015, with support from Recep Tayyip Erdoğan and other Turkish officials. The TurkStream pipeline is expected to transport Russian gas to Turkey and Europe, bypassing Ukraine, with companies like Botas, BOTAŞ, and TANAP playing important roles.