South Stream Dies

Russia has received a powerful economic and political impact, which resulted in the failure of the ambitious gas pipeline project South Stream - across the Black Sea to Europe. The refusal of the project was announced by the Russian President Vladimir Putin in Ankara yesterday.

Instead of the South Stream, which has been blocked by the European Commission, another pipeline will be built to the border of Turkey and Greece, where a new gas hub will be built.

According to the head of Gazprom Alexey Miller, Moscow and Ankara have agreed to build a new gas pipeline across the Black Sea with a capacity of 63 billion cubic meters per year. Most of this gas is intended for European countries and Russia hopes to bring these volumes through Greece.

It is noteworthy that Russia has already invested 4.66 billion euro in the South Stream. According to various estimates, the total cost of the project is estimated at nearly 20 billion euro. Now, Russia uses already invested funds for the construction of a pipeline to the European part of Turkey.

Thus, Moscow failed to put Europe on a new "gas syringe" and to create an alternative to the Southern Gas Corridor.

After losing the fight, Moscow became dependent on Turkey and partly on Azerbaijan, which controls the flow of gas through the southern route to Turkey and Europe.

The tandem Ankara-Baku will be able to influence the price of Russian gas shipments and make Moscow more compliant on political issues.

In addition, Turkmenistan and eventually Iran will have an opportunity to join the Southern Gas Corridor and to limit the market for Russian gas to Turkey. -02B-