Russia’s Gazprom buys partners’ shares in South Stream project

MOSCOW-Agence France-Presse

REUTERS Photo

Russian gas giant Gazprom said on late Dec. 29 it had taken complete control of the company behind the abandoned South Stream pipeline project, buying shares belonging to France’s EDF, Italy’s Eni and Germany’s Wintershall.

“Gazprom has today concluded an agreement with Eni, Wintershall and EDF involving the acquisition from them of 50 percent of the South Stream Transport B.V. company,” the company said in a statement.

Gazprom already holds the other 50 percent of the company’s shares. Details on the transaction were not provided.

EDF and Wintershall, a unit of BASF, confirmed they were selling their shares, 15 percent each, to Gazprom. BASF said the purchase price reimburses the cash invested by the firm, though the companies agreed not to disclose the amount.

President Vladimir Putin unexpectedly announced this month that Russia was shelving the multi-billion dollar South Stream project to deliver Russian gas to Europe, blaming the EU for throwing obstacles in its path.

The announcement came amid badly deteriorating relations between Russia and the West over Moscow’s annexation of Crimea and support for rebels in eastern Ukraine.

The pipeline would have bypassed Ukraine and flowed underneath Turkey’s waters in the Black Sea and through the Balkans, crossing Bulgaria, Serbia, Hungary and Slovenia and then Austria to connect with the main European pipeline network.

The pipeline row was seen as crucial because despite relations being at their worst since the Cold War, the EU gets about a third of its gas from Russia, with some Eastern European nations almost totally reliant on it.

Russia now plans to build a pipeline to Turkey, and Gazprom has already announced the creation of a company charged with its construction.