Russia to scrap South Stream gas pipeline

President Vladimir Putin said yesterday that he would scrap Russia's South Stream gas pipeline, in the wake of the souring relationship with the west, The New York Times reported. The project, once intended to symbolise Russia's dominance in southeastern Europe is likely to end up as a casualty of Russia's annexation of Crimea.

Smarting from the rare diplomatic reverse, Putin said Russia would redirect the pipeline to Turkey and sought to project the failure to build the pipeline as a loss for Europe and blamed Brussels for its intransigence.

The decision is described by commentators as a rare victory for the EU and the Obama administration, which had seemed powerless in the face of Putin's annexation of Crimea and fomenting rebellion in Ukraine.

Following protests and violent clashes, work at the site had ground to a halt.

The South Stream project had long been touted by Russia as a sound business, but Washington and Brussels saw it as not a very clever attempt by the Kremlin to consolidate its position as the dominant supplier in Europe, sidestepping Ukraine, where price disputes with Moscow twice interrupted supplies in recent years.

"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 during a joint press conference in Ankara with Turkish counterpart Recep Tayyip Erdogan.

"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 realisation of this project," the Russian president said during a joint press conference in Ankara with Turkish counterpart Recep Tayyip Erdogan, Spanish news agency EFE reported.

Sofia, had originally been in favour of South Stream, but in June called a halt to the work on the portion of the pipeline set to pass beneath Bulgarian territorial waters.

The EC had threatened legal action against EU member Bulgaria if construction were to continue.

Under the $20-billion plan, the pipeline would have run under Turkish Black Sea waters and then across Bulgaria, Serbia, Hungary and Slovenia to Austria, linking there with Europe's main pipeline network.

"Don't you understand that it is ridiculous for us to put hundreds of millions of dollars into a project to go through all the Black Sea and then come to the surface before the Bulgarian shore?" Putin said in Ankara.

"If Europe does not want the pipeline to be realized then that means that it will not be realized," the Russian leader said.