Italian Saipem Reaches Closure with Gazprom
Italian engineering firm Saipem and Gazprom's South Stream Transport subsidiary have "positively ended their negotiations" over a contract termination, Saipem said April 18.
It said they have signed an agreement to "amicably settle the arbitration concerning the South Stream Offshore Pipeline Installation contract entered into March 14, 2014." The contract was torn up not long afterwards when Gazprom's South Stream project, to deliver gas directly from Russia to Bulgaria, was scrapped before any of it was laid offshore. Bulgaria had violated EU competition law in awarding the linepipe contracts, forcing Russia to rethink its plans, with landfall in non-EU member Turkey instead.
TurkStream 2, South Stream's successor, will run north through Bulgaria, Serbia, Hungary and end in Austria.
Saipem said that the agreed resolution is a combination of a cash component and the access to commercial opportunities with the client, as affirmed by CEO Stefano Cao during the presentation of Saipem preliminary consolidated 2018 results on February 28.
Saipem said in a statement emailed to NGW: "The commercial part of the conclusion may also include the award of the contract in Serbia. We have been assigned preliminary engineering work for the pipeline in Serbia (announced on 2018/07/25). We are carrying it out and we are close enough to the conclusion of this engineering project. As for the execution, it is clear that it is a separate tender, so it is a separate contract.
"This settlement closes the dispute with Gazprom; objectively the negotiation opportunities reopen the commercial opportunities with this important client," Saipem concluded.