Russia Halts Construction of Southern Gas Pipeline

On Monday, December 1, Vladimir Putin, the President of Russia, announced in Ankara that Moscow has abandoned the construction of the Southern Pipeline, intended to deliver gas to Southern Europe without passing through Ukraine, "due to European opposition." Meanwhile, Russia is turning to increase energy trade with Turkey. The European Union, which has seen its relations with Russia deteriorate over the Ukraine crisis in recent months and is trying to reduce its reliance on Russian energy sources, opposed the Southern Pipeline (South Stream) passing through Bulgaria. The Russian news agency TASS quoted the President of Russia, who is in Turkey, stating, "Since we have not received permission [to pass the pipeline] from Bulgaria, we cannot continue with this project." The Southern Pipeline, described by news agencies as a $40 to $45 billion project, was supposed to reach Bulgaria from the Black Sea and then deliver gas through Serbia and Hungary to Slovenia and Austria. The second part of this pipeline was meant to extend from Bulgaria to Greece and Italy. This project would have allowed Russian gas exports to reach the West without passing through Ukraine. According to Putin, Bulgaria opposed construction in the Black Sea area, which has halted the project. Last summer, the European Union stated that Russia could only use this pipeline for gas exports to its member countries if it complies with the Union's regulations. The European Commission also announced that Gazprom (the Russian gas company) violated EU antitrust laws by submitting plans that prevent other companies from utilizing the Southern Pipeline. On the other hand, Vladimir Putin announced on Monday in Ankara that an agreement has been reached with Turkey to increase gas exports to that country by up to 3 billion cubic meters and to reduce its price by up to six percent. Europe imports nearly 30 percent of its gas from Russia, almost half of which passes through Ukraine, which has consistently been a source of disputes and concerns over gas cuts or reductions. Furthermore, the West and Russia have entered into a tense relationship over the conflicts and crisis in Ukraine, described as unprecedented since the Cold War. The West accuses Russia of intervening in the Ukrainian crisis and practically supporting separatists in that country, which Moscow denies. Europe and the United States have imposed and enacted sanctions against Russia; it is unclear how the expansion of energy trade between that country and Turkey, which is itself a candidate for EU membership, will be received by the Union and Washington. According to Reuters, Turkey is Russia's largest trading partner after Germany, and Russia is also the most important energy supplier to Turkey.