Saipem revised its claim to Gazprom associated with suspension of South Stream project

SaipemItalian subsea provider Saipem revised its claim for compensation from Gazprom, associated with the suspension of the project South Stream, according to the draft of the new Eurobond issue, which Russian gas giant prepares. Initially, Italian subsea provider asked for compensation for costs incurred in the amount of 759 million EUR plus interest, but now expected compensation was reduced to 679 million EUR plus interests. The claim is directer to the contractor company South Stream Transport, which is wholly owned by the Russian gas giant. The both sides did not reached an agreement for the compensation, but currently heading negotiations on highest level.

Saipem was awarded with a contract by the project company South Stream Transport to implement the marine part of the pipeline. Italian subsea provider even dispatched pipelayer vessels in the Black Sea waiting for the project to start. However, the Russian side stopped the project and later terminated and the contract with Saipem.

The total value of the project South Stream was estimated to 15.9 billion USD. The operator of the subsea part was the company South Stream Transport, which was joint venture of Gazprom, Eni, EDF and Wintershall. Subsequently, the shares of Western shareholders were bought by Gazprom and now South Stream Transport is wholly owned by the Russian gas giant.

The expectations are that Gazprom will use part of the assets of South Stream Transport for the construction of Turkish stream project (replacing South Stream). Observers suggest that Saipem could be hired to build the project North Stream 2.