Saipem Files Claim Against Gazprom Over Canceled Black Sea Link

  • Italian company seeking about 759 million euros in arbitration
  • Gas pipeline to Turkey was shelved by Russia last year

Saipem SpA filed a 759 million-euro ($823 million) claim against Gazprom PJSC after the Russian company canceled a contract to lay a natural-gas pipeline under the Black Sea.

The Italian contractor filed a request for arbitration to the Paris-based International Chamber of Commerce in November, Saipem said in documents dated Jan. 25 and published on its website. Gazprom’s press service declined to give immediate comment.

Russia scrapped its plan to build the South Stream link to Bulgaria in 2014, citing opposition to the project from the European Union. An alternative route to Turkey, which became known as Turkish Stream, was shelved last year as the two nations took opposing positions over the war in Syria.

Saipem had won two contracts for work on South Stream valued at a total of 2.4 billion euros. The largest deal, a 2 billion-euro agreement, was later transferred to the Turkish Stream pipeline and then canceled by Gazprom. The Russian company itself has spent about $20 billion on the halted project in the past three years, including on expanding Russia’s gas network to feed the link.

Saipem is now a candidate for a further contract -- to build a planned Baltic Sea gas pipeline between Russia and Germany, known as Nord Stream 2, Gazprom Chief Executive Officer Alexey Miller said Jan. 13. Saipem helped to build the existing Nord Stream link.

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