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Putin: South Stream "will not be carried out"

Russia to focus energy efforts in other directions, president says.

By Daniel J. Graeber

ANKARA, Turkey, Dec. 2 (UPI) -- If the European community doesn't want to back the planned South Stream gas pipeline, it will be taken off the table, the Russian president said from Ankara.

Russia energy company Gazprom said Tuesday it signed a memorandum of understanding in Turkey, its second largest customer, to build a new gas pipeline through the Black Sea.

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Turkey sits at the crossroads between the East and the West. Billing itself as an important energy hub, the country is also slated to host parts of the Southern Corridor, a gas pipeline network stretching from the Shah Deniz gas field in the Azeri waters of the Caspian Sea to the European market.

For Europe, the Southern Corridor is meant to break the Russian grip on the energy sector. Gazprom touted the South Stream natural gas pipeline as a means to avoid geopolitical obstacles to conventional routes to Europe through Ukraine with an alternate pipeline network, though Russian President Vladimir Putin said from Ankara the project is now dead.

"If Europe does not want to carry out (South Stream), then it will not be carried out," he said. "We are now going to focus our energy resources in other directions."

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European leaders are wary of allowing companies that produce gas to control the corresponding transit systems and in August, the government of host country Bulgaria called for a suspension of all actions on South Stream because "the project does not meet the legal requirements of the European Commission."

"Taking account of the fact that until now we have not received permission from Bulgaria, we believe that in the current conditions Russia cannot continue with the realization of this project," Putin said.

Members of the European Parliament in September passed a resolution calling on member states to cancel planned energy sector agreements with Russia, including the South Stream gas pipeline.

In October, potential host country Serbia said preparatory work for the project was proceeding as planned, but "all other matters" related to the pipeline need to be settled by Russia and Brussels.

Gazprom had said the contracts needed to start construction of the onshore section of the pipeline later this year were already signed. South Stream had an optimum capacity of 2.2 trillion cubic feet per year. It would've stretched across the Black Sea to Bulgaria and then north to European markets.

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