A Saipem pipelaying vessel

Italian contractor Saipem has filed a €759m claim against Gazprom for cancelling the contract for the construction of the underwater section of the South Stream gas pipeline in late 2014. Attempts to settle the issue out of court now appear to be at an end after, according to Saipem, the Gazprom’s South Stream Transport subsidiary was given notification of impending arbitration proceedings on December 15. The Russian company claims that it had tried to negotiate the dispute peacefully but that Saipem had decided to sue.

Saipem was appointed general contractor for the €2bn construction of the first pipeline running from Russia to Bulgaria under the Black Sea in March 2014, and subsequently won the contract to lay a second in conjunction with the Swiss-based Allseas Group; but Russia cancelled the project in December 2014 after the EU put pressure on Bulgaria to withdraw its involvement, claiming that it was in contravention of its Third Energy package.