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Europe seeks clarity on South Stream

Kremlin has said decision to end gas pipeline for Europe is final.

By Daniel J. Graeber

BRUSSELS, Dec. 10 (UPI) -- Members of the European Union said they want clarity from the Russian government on the status of the South Stream natural gas pipeline.

South Stream is Russia's answer to energy diversification needs in the European market. Most of the gas Russia sends to Europe runs through Soviet-era pipelines in Ukraine, where conflict and political disputes between Kiev and Moscow present risks.

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Representatives from Austria, Bulgaria, Croatia, Greece, Italy, Romania and Slovenia met in Brussels with European Energy Commissioner Maros Sefcovic to discuss gas infrastructure priorities in their respective regions.

Russian President Vladimir Putin last week declared an end to South Stream, planned to cross the Black Sea to the southern European market.

"The member states directly concerned took note of the currently unofficial nature of this announcement and invited the commissioner to clarify the situation with the Russian side," a note Tuesday from the European Union said.

European leaders are wary of companies like Russian natural gas company Gazprom, which control products and their corresponding transit systems. 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 administration.

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"The integration of gas markets and the diversification of gas supplies will namely require putting in place the necessary infrastructure and implementing harmonised rules for the benefit of customers in that region," members said. "New routes operated in line with European law can also contribute to increased security of supply in the region."

Fitch Ratings said last week the South Stream decision reflects low demand for additional natural gas volumes in the European market as much as it does frustration with Russia's role in the market. Austrian energy company OMV, a South Stream consortium member, said it viewed the recent announcements as political in nature.

Russian Energy Minister Alexander Novak said the pipeline decision was final.

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