The contract on the construction of the South Stream pipeline has been cancelled, Belgrade media said on Wednesday, citing a statement from the Russian gas company Gazprom.
Gazprom's board of directors has approved an agreement reached with the South Stream Transport company on the termination of a guarantee contract which refers to Gazprom Export's obligations under a 2 October 2013 gas transport agreement, Gazprom said.
Russian President Vladimir Putin said on 1 December 2014 that the South Stream project would be cancelled.
The announcement of the cancellation of construction is not good news for Serbia, which has been loyal to the project and did not renounce it "even under the biggest pressures possible," Serbian Prime Minister Aleksandar Vucic said earlier when Moscow announced that it would stop the project because the European Union did not want it.
"Serbia in no way contributed to that decision. It invested in the project for seven years, however we are paying the price of a dispute between big powers," Vucic said that.
On November 24, 2013, Serbian President Tomislav Nikolic ordered the construction of a Serbian connection to the South Stream multinational project. He said the beginning of construction, aside from energy security, would enable Serbia to directly hire 2,500 and indirectly 100,000 workers. He said the project would ensure long term gas supply for 35 million households throughout Europe.