Following the recent announcement by Russian president Vladimir Putin concerning the cancellation of the South Stream gas pipeline project, Salzgitter AG has issued a press announcement claiming that any possible loss accuring to the German steelmaker will be covered by trade credit insurance company Euler Hermes.

Salzgitter AG holds a 50% stake in Europipe GmbH, which is a contractual partner of Netherlands-based South Stream Transport BV.

Gazprom has a 50% partnership stake in South Stream Transport alongside other EU energy firms.

South Stream Transport has been reported as saying that European companies involved in the construction of the pipeline will suffer direct losses of at least 2.5 billion Euros following Russia's cancellation of the project, with losses to 'foreign companies' estimated at 2.82 billion Euros.

The South Stream Pipeline project has been volatile to say the least following pronouncements by Brussels that Gazprom's co-ownership of the pipeline and supplier of fuel breached EU rules. There has also been a lot of dilly dallying by Bulgaria and, ultimately, Russia has lost its patience and pulled the plug.

The original plan – to pipe gas through the Black Sea into Bulgaria – has now been changed. The Russians plan to re-route the pipeline via Turkey, causing consternation for the Serbians, whose Prime Minister, Aleksandar Vucic, has told the Serbian people not to worry and that a solution will be found. Similar sentiments have been expressed by other countries that would have benefitted economically from South Stream, notably the Hungarians.

Hungary's Foreign Minister Peter Szijjarto said his country would now have to find an alternative gas supplier.