South Stream still on, Saipem says. Shares drop

Italian Saipem, a company which was supposed to carry out a giant part of the South Stream pipeline work in the Black Sea, has said that the work on the project will continue, despite Vladimir Putin saying it will not.

The company said that, while noting the statements by the Russian president end Gazprom CEO, it has not received any formal notice of termination of the contract from the client, South Stream Transport BV.

“Operational activities therefore continue to progress,” Saipem has said adding that the potential hold ups of work and any possible cancellation of the South Stream project are subject to the terms of the contract.

South Stream Transport is a consortium between Russia’s Gazprom, Italy’s Eni S.p.A., France’s EDF, and Germany’s Wintershall.

Saipem in March this year signed a contract for the pipe laying works for the offshore section of the project, which was designed to deliver Russian gas to the European market. Additionaly, the Italian oilfield services provider entered into a $552 million deal to provide supporting works relating to the construction of the second line of the South Stream Offshore Pipeline .

However, according to a statement by Russia’s president Vladimir Putin, Russia will now drop the South Stream as a response to the EU opposition to the project, and turn to Turkey.

Saipem shares were down 8.3 per cent to 10.34 Euro at 13:17 CET.

Offshore Energy Today contacted South Stream Transport seeking comment on the news that the project would be cancelled. The consortium’s spokesperson said it did not have further information.

Offshore Energy Today Staff

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