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Gazprom CEO Alexey Miller signs the South Stream pipeline. Image courtesy of Gazprom.

Russian president Vladimir Putin said Monday that a $40 billion pipeline set to carry gas through Bulgaria and into Europe is “finished.”

The South Stream pipeline will be rerouted through Turkey, creating a hub along the Turkish-Greek border to supply southern EU countries.

South Stream, operated by Russia’s Gazprom, will move about 63 billion cubic feet of gas into the EU per year, or about 10 percent of all EU demand.

Western sanctions made it difficult to press ahead with the pipeline’s Bulgaria route.

Bulgaria, an EU member, has repeatedly halted construction on the pipeline amid pressure from EU officials.

Falling oil prices and slumping gas demand have also made the project less attractive.

State owned Gazprom sells the majority of its gas through contracts linked to oil.

With oil prices sliding by 40 percent since June and demand for gas slipping 10 percent in the last four years Gazprom’s revenue have taken a sizable hit.

Gas transported through the pipeline would have to be marketed at $9.50 to $1.50 million per British thermal unit, including a 30 percent export duty, to be profitable.

Average EU gas prices have hovered between $6 to $9 million per British thermal unit this ear.

Turkey will receive a 6 percent price discount if it agrees to the project with the possibility of deeper discounts down the line, ABC News said.

The cancellation sent shares in Italy’s Saipmen, a major contractor for the project, tumbling as investors worry the company could lose $3 billion in revenue tied to the pipeline.

Saipem said it has not received a formal notice of the project’s termination.