South Stream

South Stream
Company type	Joint venture
Industry	Energy, Natural gas pipeline
Founded	2007
Defunct	2014
Fate	Project cancelled and replaced by Turkish Stream
Headquarters	Zug, Switzerland
Products	Natural gas transportation
Parent	Gazprom, Eni, Électricité de France, Wintershall (shareholders of South Stream Transport AG)

Adapted from the English Wikipedia article South Stream, available under CC BY-SA 4.0Updated 10 August 2025

South Stream (; ; ; ; ; ) was a pipeline initiative that was ultimately discontinued, intended to convey Russian natural gas beneath the Black Sea to Bulgaria and then onward through Serbia, Hungary, and Slovenia to Austria.

This project was at odds with the European Union's Third Energy Package, which requires the separation of gas production and sales from transmission operations. Because it failed to comply with these regulations, the Russian government terminated South Stream on 1 December 2014, seven years after its inception.

South Stream was designed as an alternative to the Nabucco pipeline project, which was eventually abandoned in favor of the Trans Adriatic Pipeline (TAP), a project aligned with EU laws by obtaining an exemption for Third Party Access.

Construction of Russia's onshore facilities commenced in December 2012. The cancellation resulted from opposition within the EU, Russia's 2014 annexation of Crimea, and ensuing European sanctions. South Stream was replaced by other ventures, notably the Tesla pipeline and Turkish Stream (later renamed TurkStream), which was completed and began supplying gas to Bulgaria on 1 January 2020.

History

The South Stream pipeline project was unveiled on 23 June 2007 when Paolo Scaroni, CEO of Italian energy firm Eni, and Alexander Medvedev, Vice-Chairman of Russian Gazprom, signed a memorandum of understanding in Rome to initiate its development. Subsequently, on 22 November 2007 in Moscow, Gazprom and Eni agreed to form a joint project company tasked with marketing and conducting feasibility assessments.

On 18 January 2008, Russia and Bulgaria signed a preliminary agreement for Bulgaria’s involvement, establishing a joint venture with equal ownership to construct and operate the Bulgarian segment. Bulgaria ratified this agreement on 25 July 2008. Prior to this, Gazprom and Serbian state-owned gas company Srbijagas had agreed on 20 December 2006 to explore a pipeline connection from Bulgaria to Serbia. On 25 January 2008, Russia and Serbia formalized an agreement routing a northern branch of South Stream through Serbia and set up a joint company responsible for Serbia’s pipeline section and gas storage near Banatski Dvor. On the same day, Russia and Hungary agreed to collaborate on building and operating the Hungarian portion. Later, on 29 April 2008, Russia and Greece signed an intergovernmental treaty concerning the Greek section.

In Sochi on 15 May 2009, in the presence of Prime Ministers Vladimir Putin and Silvio Berlusconi, gas companies from Russia, Italy, Bulgaria, Serbia, and Greece signed a construction agreement. On 6 August 2009, Russian PM Putin and Turkish PM Recep Tayyip Erdoğan agreed on routing the pipeline through Turkish territorial waters. After discussions between Slovenian PM Borut Pahor and Putin on 14 November 2009, Russia and Slovenia signed an accord routing part of the pipeline through Slovenia towards Northern Italy. On 17 November 2009, Gazprom and Srbijagas established South Stream Serbia AG to oversee Serbia’s pipeline segment.

An agreement linking Croatia with South Stream was signed on 2 March 2010 by Russian Energy Minister Sergei Shmatko and Croatian Economy Minister Djuro Popijac. On 19 June 2010, Gazprom, Eni, and Électricité de France confirmed EDF’s participation in the project. Subsequently, on 21 March 2011, Slovenia and Russia formed the joint venture South Stream Slovenia.

South Stream AG was registered in Switzerland on 18 January 2008 as a company equally owned by Gazprom and Eni. Later, on 16 September 2011, Gazprom, Eni, Électricité de France, and Wintershall signed a shareholders' agreement creating South Stream Transport AG for managing the Black Sea segment; this company was officially incorporated on 3 October 2011 in Zug, Switzerland.

Turkey granted final approval for the pipeline’s passage through its waters on 28 December 2011. Final investment decisions followed with Serbia approving on 29 October 2012; Hungary on 2 November; Slovenia on 13 November; Bulgaria on 15 November; alongside approval for the offshore section also granted on that date. Construction activities commenced at the Russkaya compressor station near Anapa on 7 December 2012.

On 25 July 2013, the Republic of Macedonia consented to connect its section with South Stream.

In early 2014, contracts were awarded to Saipem and Allseas for laying offshore pipeline segments; additional contracts were anticipated by early 2015. However, following Russia’s annexation of Crimea in April that year, the European Parliament opposed South Stream strongly while advocating for alternative EU gas supply routes. Consequently, Bulgaria suspended construction amid EU infringement proceedings related to competition law breaches.

In April 2014, Russia lodged a complaint with the World Trade Organization challenging EU energy regulations that restrict suppliers from owning transit infrastructure such as pipelines.

On 1 December 2014 during an official visit to Turkey, President Putin announced Russia’s withdrawal from South Stream citing international sanctions and failure to secure EU construction permits. Instead, Russia initiated development of the Turkish Stream pipeline traversing Turkey; renamed TurkStream, it began delivering gas to Bulgaria from 1 January 2020.

Putin also indicated that Russian gas exports would increasingly rely on liquefied natural gas projects worldwide. In 2015, deliveries of Russian gas to Turkey rose by three billion cubic meters via the Blue Stream pipeline; plans were made for a new undersea pipeline with an annual capacity around sixty billion cubic meters enabling Turkey to resell Russian gas into Europe.

In 2018, Bulgarian President Rumen Radev proposed restarting construction efforts for the South Stream pipeline.

Route

The pipeline consisted of three main segments: the Russian onshore part, the offshore section beneath the Black Sea, and the pipelines traversing Southeast Europe. The Russian land segment stretched from the Pochinki compressor station to Russkaya near Anapa. The offshore portion, measuring 931 km, was designed to run from Russkaya across the Black Sea to Galata close to Varna, Bulgaria. To avoid Ukraine's exclusive economic zone amid the Russia–Ukraine gas disputes, the route was redirected through Turkish maritime territory. After Russia annexed Crimea in 2014, a more direct passage through Crimean waters became feasible.

The land section spanning 1,455 km was planned from Varna to Pleven. Initially, the southwestern extension was intended to continue through Greece and across the Ionian Sea to southern Italy but was subsequently abandoned. The revised northwestern trajectory extended from Pleven into Serbia, passing through Zaječar, Paraćin, and Čenta. From Čenta, the primary pipeline directed toward Gospođinci, with a subsidiary branch leading to Republika Srpska in Bosnia and Herzegovina. Srbijagas envisioned a 480 km branch running along the Sava river, capable of transporting 1.2 billion cubic meters annually, connecting Banja Luka and Sarajevo. Montenegro was also evaluated as a potential connection point.

Before arriving at Gospođinci, the main pipeline would divide: one path continued through Serbia and Hungary toward Baumgarten an der March in Austria; another routed through Gospođinci and Bački Breg into Hungary with a branch extending to Croatia. Within Hungary, it would pass through Hercegszántó and Tornyiszentmiklós before entering Slovenia and proceeding toward Tarvisio, supplying northern Italy.

Technical description

The offshore feasibility study was performed by Saipem, an Eni subsidiary, with planning support from INTECSEA, part of WorleyParsons. Gazprom’s affiliate Giprospetsgas acted as the general design contractor. The offshore pipeline was engineered to transport natural gas annually via four parallel lines, each designed for a specific capacity. The system utilized pipes with a diameter of , constructed to withstand working pressures of and featuring walls of thickness . Completion of the first line targeted late 2015, with subsequent lines planned through 2017. The offshore segment's estimated expenditure amounted to €10 billion.

Onshore sections across Bulgaria, Serbia, Hungary, and Slovenia were designed for capacities of at least annually. This segment included eight compressor stations and had an anticipated cost of €6 billion.

Two principal gas storage sites were planned: one underground facility in Hungary with a minimum capacity of , and another located at Banatski Dvor in Serbia with . Hungarian energy firm MOL Group proposed its Pusztaföldvár field as a storage location. British company Melrose Resources intended to convert Bulgaria’s Galata offshore field into a gas storage facility with an initial capacity target for 2009. Additionally, there were indications of plans to link with the Wingas-owned Haidach gas storage.

Project companies

Multiple entities were responsible for constructing and managing various parts of the pipeline. Two Swiss-based companies in Zug, each established with share capital of 100,000 CHF, were created specifically for the offshore segment. South Stream AG—a joint venture between Gazprom and Eni—was founded on 18 January 2008; South Stream Transport AG, owned by Gazprom, Eni, Électricité de France, and Wintershall, was incorporated on 3 October 2011. Marcel Kramer, formerly CEO of Gasunie, served as head of South Stream Transport AG while Oleg Aksyutin held executive director responsibilities. Gazprom owned half of South Stream Transport AG shares; Eni held 20%; Électricité de France and Wintershall each controlled 15%. In November 2012, South Stream Transport B.V. was incorporated in Amsterdam. Earlier, Eni had registered South Stream BV in Amsterdam but renamed it Eni JPDA 11-106 BV in February 2012.

The Bulgarian portion is operated by a joint venture between Gazprom and Bulgargaz; Serbia’s section by Gazprom-Srbijagas. Hungary's segment is managed by a partnership between Gazprom and state-owned Hungarian Development Bank MFB, which acquired feasibility studies from SEP Co., itself a Gazprom-MOL collaboration. Slovenia’s pipeline section is run by a Gazprom-Geoplin Plinovodi joint venture. For Croatia, plans included forming an equally owned Russian-Croatian company responsible for construction and operation.

Nabucco pipeline project

The South Stream initiative was often seen as a competitor to the Nabucco pipeline scheme. Analysts such as Alan Riley from London City University interpreted South Stream as a strategic effort to undermine Nabucco and strengthen Russia's foothold in the area.

Paolo Scaroni, CEO of Eni, suggested combining the Nabucco and South Stream projects to minimize investment requirements, decrease operational expenses, and enhance profitability. Nevertheless, Russian Energy Minister Sergei Shmatko dismissed this idea, emphasizing that South Stream offers greater competitiveness and that the two pipelines do not directly compete. Furthermore, OMV, involved in both ventures, confirmed that no discussions about a merger were underway.

Conflict with Ukraine

The South Stream pipeline was regarded as redirecting gas shipments away from Ukraine rather than introducing additional supplies to Europe. To avoid crossing Ukraine’s exclusive economic zone, the pipeline’s course was modified to pass through Turkish maritime territory.

Offer to Romano Prodi

Prior to stepping down as Italy's Prime Minister, Romano Prodi received an invitation from Gazprom to assume the Chairmanship of South Stream AG, a position comparable to that held by former German Chancellor Gerhard Schröder at Nord Stream AG, the company managing the Nord Stream 1 pipeline. Prodi declined the offer, expressing his desire for a break from political life.

Stroytransgaz contract

In May 2014, the contract for constructing the Bulgarian segment was granted to Stroytransgaz, a company controlled by Gennady Timchenko through Volga Group. Timchenko had been subjected to sanctions following Russia's annexation of Crimea due to his close association with President Putin.

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