RT: 2 big pipeline projects on hold, as EU-Russia relations sour over Ukraine

Gazprom, Russia’s largest natural gas producer, will see delays in two pipe projects, the South and Nord Stream, as the company is caught in a diplomatic crossfire over Ukraine.

Gazprom’s $45 billion South Stream project, slated to open in 2018 and deliver 64 billion cubic meters of natural gas to Europe, is a strategy for Russia to bypass politically unstable Ukraine as a transit country, and help ensure the reliability of gas supplies to Europe.

The pipeline deliveries via the Black Sea are expected to provide about 15 percent of Europe's annual gas needs in 4 years time.

But to become operative, it needs crucial approval from EU legislators, as the Third Energy Package regulation has become a major stumbling block.

The regulations limit pipeline ownership and require access for other gas providers. The Third Energy regulation mandates 50 percent of the pipeline can be operated by Gazprom, but the other 50 percent must be operated by a third party, a condition Russian energy ministers do not accept, as Gazprom is the only company that has the right to export gas via pipeline.  MORE