Saipem confirmed yesterday that Gazprom has cancelled its €2.4 billion contract to build a pipeline under the Black Sea.
Gazprom subsidiary South Stream Transport BV has suspended the contract with Italy’s Saipem SpA for the construction of the first line of the offshore section of the Turkish Stream gas pipeline.
The cancellation notice sent to the Italian oil and gas industry contractor cited the failure to reach agreement on a number of issues related to the implementation of the Turkish Stream project, according to reports.
Saipem said it had been notified of the contract termination as one of its vessels was mooring in Russian waters to start laying pipes. Any compensation will be determined in accordance with the contract's terms, it said.
The now-terminated Saipem contract is the latest in a string of failed attempts by Gazprom to diminish Ukraine's role in its gas exports.
Gazprom is reportedly now seeking other potential contractors.
Edited from various sources by Elizabeth Corner
Sources: NY Times, Reuters, Novinite