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Gazprom Halts Pipe Deliveries to Turkish Stream After Expansion Freeze

The main office of Russian gas exporter Gazprom is seen in Moscow.

Gazprom has told pipeline makers to suspend deliveries of pipes for expanding Russia's network to be connected to the proposed Turkish Stream project, an industry source said on Monday.

The delay is another snag in Moscow's plans to build a gas pipeline via the Black Sea to Turkey, and on to south Europe in order to bypass Ukraine.

"We've got a note [from Gazprom] to suspend deliveries," the source in the pipeline making industry said.

Russia's RBC daily reported on Monday that Gazprom had postponed the network expansion, citing an internal letter.

It valued possible losses of Gazprom's contractors at 120 billion rubles ($2.1 billion) if it abandons the expansion plans.

Gazprom is building the Southern Corridor, a 2.506-kilometer long gas pipeline network on Russian territory, to allow it to boost supplies to Turkey.

The company said in e-mailed comments that the construction of the network was going according to a plan.

Under Gazprom's plans, the Turkish Stream pipeline will be split into four lines with a total capacity of 63 billion cubic meters a year.

The first line, due to be launched next year, is to supply just Turkey. However, Russia and Turkey have yet to agree on the price of the gas. Turkish energy company BOTAS has threatened Gazprom with international arbitration if a price deal is not reached.

Russian companies Severstal, Chelpipe, OMK and TMK are the leading suppliers of gas pipelines.

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