With the end of the South Stream project, Russia will have to adapt to a new market where it will not provide gas delivery to end users, Aleksey Miller, the head of Gazprom said in an interview confirming South Stream will not be resumed.
Russia’s Gazprom energy giant has given up the long-cherished South Stream gas pipeline to Europe because of the EU blocking its realization with the Third Energy Package, which prohibits one company to do the full cycle: extraction, transportation and sale of energy resources.
Now Gazprom is going to use already constructed South Stream infrastructure on the Russian territory to build a new gas pipeline across the Black Sea to Turkey, with an annual capacity of 63 billion cubic meters.
That move is going to become a game changer for the European energy market.
“Our strategy towards the European (gas) market is undergoing fundamental changes. The decision to halt the South Stream marks the beginning of the end of our previous market model, when we aimed at ultimate customer delivery in Europe".
South Stream is definitely over
The head of Gazprom confirmed that the South Stream project is closed once and for all, because of the EU “openly blocking” its construction by prohibiting Bulgaria from constructing its part of the pipeline.
Turkey will now control the EU ‘gas valve’
The new gas contract with Gazprom endowed Ankara with economic and political benefits, while Europe and primarily Bulgaria lost billions in investments, shared Miller.
More specifically, Bulgaria lost more than 6,000 new jobs and over $3 billion of investment, leaving alone a profitable status of a transit entity that promised the country a guaranteed annual income. All this now goes to Turkey – together with all gas volumes being transported via Bulgaria (after Ukraine) right now.
Once the construction of the new pipeline is over – the transit through Bulgaria will be discontinued, stressed Miller.
“The EU and the European Commission simply presented Turkey with a ‘gas valve’. I believe Turkey might use it in its dialogue with Europe. And we got a new strategic partner in the gas business,” the Gazprom CEO concluded.