Russia to abandon South Stream pipeline.

FT: “President Vladimir Putin said on Monday that Russia would stop construction of the South Stream gas pipeline, shelving a strategically important project that Moscow was counting on to cement its influence in south-eastern Europe.”
“Speaking after talks with President Recep Tayyip Erdogan, his Turkish counterpart, in Ankara, Mr Putin said Russia would abandon the project to bring Russian gas to Bulgaria under the Black Sea, bypassing Ukraine, unless the EU dropped its opposition.
The European Commission has refused to give Gazprom the exemption it would need to operate the pipeline at full capacity, viewing it as a potential further tool for the Kremlin to exert economic control over southern and eastern Europe.
Mr Putin said that Moscow would look instead at developing a gas hub to southern Europe via Turkey, the subject of a memorandum of understanding signed by the two countries on Monday.
“If Europe does not want to carry out [South Stream], then it will not be carried out,” he said. “It would be ridiculous for us to invest hundreds of millions of dollars constructing a project, bringing it to Bulgaria’s borders and having to drop it from there on.”
He claimed the demise of the project would cost Bulgaria about €400m a year in foregone income and suggested that Bulgaria had not behaved “as an independent country” over the issue – an apparent reference to the EU’s misgivings about South Stream.
The move came on a day when the continued slide in the price of oil sent the rouble tumbling against the dollar.
Mr Putin was speaking during a state visit to Turkey intended to demonstrate the range and depth of Russian-Turkish economic ties at a time when the EU and US have imposed sanctions on Moscow.
His comments are the clearest admission so far from Moscow that the controversial pipeline is set to be scrapped, with government officials and Gazprom executives until now insisting that construction on the offshore section of the project was due to begin within months.”