PUTIN SAYS RUSSIA DROPPING SOUTH STREAM OVER EU OPPOSITION

Russia can't implement the South Stream project because of the European Commission's opposition to it, Russian President Vladimir Putin said on Monday.

The project, designed to carry gas through a pipeline from Russia under the Black Sea to Bulgaria and further west to Europe, has been frozen by the European Commission which has said it violated EU energy legislation.

Russia is forced to withdraw from South Stream due to the EU’s unwillingness to support the pipeline, and gas flows will be redirected to other customers, Putin said at a joint news conference after talks with his Turkish counterpart, Recep Tayyip Erdogan, in Ankara.

"We believe that the stance of the European Commission was counterproductive. Well, if Europe doesn’t want it [South Stream project] implemented, it won’t be implemented,” the Russian president said.

He also suggested that Bulgaria demanded the EU to redeem its missed benefits relating to the South Stream project.

"Bulgaria would have received as direct budget revenue no less than EUR 400 M a year only from transit fees," Putin said.

"Having in mind that we haven't yet received Bulgaria’s permission, we think Russia is unable to continue implementation of that project. I mean that now we have to launch construction of the pipeline section in the Black Sea. We can't begin the construction of the seabed section until we have received Bulgaria’s permission,”

In the current situation, Russia cannot launch South Stream but it is ready to build another pipeline to help Turkey meet its gas needs.

Russia is also ready to build an additional gas hub on Turkey's border with Greece.

"If this idea is considered to be expedient, we can create an additional gas hub for consumers in southern Europe on Turkish territory on the border with Greece,” said Putin, who is on a one-day state visit to Turkey.

"Both sides are working on turning the preliminary deal into a definite, finalised deal as soon as possible," Erdogan said at the news conference.

Putin also said Russia would increase gas supplies to Turkey by 3.0 billion cubic meters (bcm) through the operating Blue Stream pipeline to help Turkey's growing economy meet its gas needs.

Russia will also cut the gas price for Turkish consumers by 6% from January 1 next year, and is ready to decrease it further, Putin added, referring to Turkey as Russia's 'strategic partner'.