The future of the South Stream gas pipeline is in question

The prospects for the South Stream pipeline project, which is required to transport Russian gas to Europe, are in doubt due to the escalating dispute over Ukraine.

Paolo Scaroni, CEO of ENI, said during parliamentary hearings in Rome that the future of the pipeline is "somewhat darkened." The large-scale South Stream project, which would be able to supply more than 60 billion cubic meters of gas to Europe, is now seen as a key instrument for manifesting Russia's ambitions to strengthen its position as the dominant gas supplier to Europe.

However, the situation with Crimea has increased tensions between Moscow and the West, prompting the European Union to announce plans to delay negotiations on the project. Previously, it was assumed that the pipeline with a length of 2,400 km will be completed in full by 2018. Its estimated value is about 17 billion euros. In addition to Gazprom and ENI, the other project shareholders are the French EDF and the German Wintershall.

Scaroni said the crisis in Ukraine could threaten the difficult process of building a pipeline that will bypass Ukraine through the Black Sea and a number of European states. He said that "This will question the authority that European countries have to grant to complete the project."

Russia has long sought to reduce its dependence on pipelines that cross Ukraine, which carry about half of its gas exports to Europe. Gazprom earlier said that Italy's Saipem had secured a € 2bn contract to build the first stage of the subsea pipeline.