Saipem Dropped from South Stream Contract
Italy’s Saipem has lost a major contract related to the pipe laying activities under the Black Sea.
According to reports, Russian gas giant Gazprom, has through its South Stream Transport BV, informed Saipem to terminate the contract for the construction of the first line of the offshore section of the pipeline, signed in the framework of the project South Stream in 2014.
As earlier reported, Eni-controlled Saipem was the main contractor at South Stream and had two deals worth 2.4 billion euros.
Reportedly, Gazprom terminated the deal after failing to reach an agreement with the Milan-based company on the Turkish Stream project and will be on the lookout for a potential new contractor for the first line of Turkish Stream.
Namely, In May this year, Saipem was cleared to resume its pipeline construction operations in the Black Sea after Gazprom, now a 100% owner of South Stream Transport, set the launch of Turkish Stream for December next year and Sapiem was speculated as the main contractor for that job as well.
In addition, Saipem also confirmed today that late in the evening of July 8 it received notification of the termination for convenience of the South Stream BV contract.
“The termination for convenience is a standard contractual clause which provides for the termination of the agreement in the absence of a contractual breach, with compensation determined in accordance with the terms and conditions of the contract,” said the company in a statement.
Furthermore, Saipem has confirmed that the pipelaying vessel Castoro 6 was in the process of mooring in Russian waters to start pipelaying activities.
It now remains to be seen what will happen to the subcontractors hired by Saipem to work on this project.