Image courtesy of Saipem.

Services player Saipem received official notice Thursday that its marine spread for the recently cancelled South Stream pipeline has been suspended.

The company had not received formal notice of the suspension when Russia’s Gazprom said Monday it had scrapped the $40 billion project.

The suspension covers all vessels currently laying pipeline in the Black Sea and supporting the project.

South Stream would have carried Russian gas through Bulgaria and into Europe. But pressure from EU members, who have imposed economic sanctions against Russia becasue of Crimea, repeatedly halted work on the project.

Saipem said it cannot yet determine the economic impact of the suspension “as both the duration of the suspension and the client’s ultimate decision on the project are unknown.”

CEO Umberto Vergine told an Italian newspaper earlier this week the company could lose $1.55 billion in 2015 revenue if the project is permanently cancelled.

The pipeline was shelved in favor of a new route that will transport 63 billion cubic feet of gas per year into southern Europe through Turkey.

Russia’s Gazprom holds a 50 percent stake in South Stream.

Italy’s Eni, Siapem’s parent company, holds a 20 percent stake.

Eni has not commented on the contract suspension.


Leave a Reply