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Support for South Stream withdrawn
The Italian government seems to have withdrawn support for the South Stream pipeline under the Black Sea as European Union (EU) relations with Russia continue to cool, writes Brenda Dionisi in Milan. Italy was expected to be a key customer of South Stream gas, but its government is now promoting a new strategy securing a diversified range of energy imports, including supplies from Africa and the Levant.
On 19 November 2014, Italy’s Minister for Economic Development Federica Guidi said the South Stream pipeline was no longer a top priority for the country. Spokesperson Enrico Romagna Manoja confirmed to Petroleum Review that: ‘South Stream is no longer one of Italy's strategic energetic priorities because it does not guarantee diversification amongst exporting countries,’ notably because it will increase reliance on Gazprom. On 2 December 2014 Italian Prime Minister Matteo Renzi underpinned the shift, stating that for Italy, ‘the energy issue [in the future] will veer more towards a North-South axis than an East-West one’.
Similarly, state-controlled oil and gas producer Eni has said it is unwilling to invest significant sums in the €32bn South Stream pipeline. In early November the company’s CEO Claudio Descalzi had stated that Eni would not abandon the South Stream as long as the ‘required investment does not exceed €600mn’.
In view of such uncertainty, in early December 2014 Russia’s President Vladimir Putin said Russia was ready to drop South Stream in favour of a new pipeline transporting the country’s natural gas to Turkey. Gazprom has confirmed its interest in this project, although Romagna-Manoja would not comment on Putin’s remarks. Eni was also contacted but declined to comment.
