REUTERS
Russian energy giant OAO Gazprom decided on July 1 to suspend the expansion of the Southern Corridor gas pipeline system, which was planned to enter the Turkish Stream in the direction of Turkey, Russian information agency RBC reported with reference to a letter from a Member of the Management Committee at Gazprom, Sergey Prozorov.
The letter was addressed to three subsidiaries, namely, Gazprom Invest, Gazprom Tsentrremont and Gazprom Komplektatsiya, according to RBC.
In his letter, Prozorov requested the companies' directors to suspend from July 1 and until "special permission" investment projects on the expansion of the Southern Corridor gas pipeline system, which was designed to link land and sea parts of the South Stream pipeline.
Last year, Russia announced its plans to replace the South Stream with the Turkish Stream. It was planned to finish the construction of the Southern Corridor, which would feed the Turkish Stream with gas (part of the route and the main parameters of the two "streams" were the same – four pipeline strings with a total capacity of 63 billion cubic meters of gas per year).
On June 30, Bloomberg sources disclosed the possibility of a delay in the launch of the Turkish Stream construction – at least until October 2015 due to Russian gas prices being negotiated by Moscow and Ankara. The agreement between Turkish Botas (gas importer) and Russian Gazprom, as well as relevant intergovernmental agreements between the two states should have been signed by the end of June, which did not happen. In May, Gazprom CEO Alexei Miller told reporters that the Turkish Stream would be commissioned by December 2016, while Deputy Chairman of the Management Committee of Gazprom Alexander Medvedev assured in June that gas transit to Europe through a new gas pipeline would be launched in 2020.
Previously, it was planned that Russian gas would be transmitted to a natural gas hub on the Turkish-Greek border. However, last week, Miller told reporters that the gas monopoly had different options for gas transit stations from the Turkish Stream not only on the Greek border.
According to an employee of one of Gazprom contractors, the cost of laying one kilometer of the pipeline in land areas is estimated at RUR 150 million, with 80% of this amount constituting the payment to the contractor. Thus, if the Southern Corridor project is not resumed, the losses of Gazprom's partners may hit nearly RUR 120 billion.