Putin drops South Stream gas pipeline to EU, courts Turkey

Russia's President Vladimir Putin (L) shakes hands with Turkey's President Tayyip Erdogan after a news conference at the Presidential Palace in Ankara December 1, 2014. REUTERS/Umit Bektas

ANKARA (Reuters) - Russia on Monday scrapped the South Stream pipeline project to supply gas to southern Europe without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline, with a promise of hefty discounts.

The EU, at loggerheads with Moscow over Ukraine, and keen to reduce its energy dependence on Russia, had objected to the $40 billion South Stream pipeline, which was to enter the EU via Bulgaria, on competition grounds.