President Vladimir Putin has announced that Russia will drop the South Stream natural-gas pipeline project because of the European Union's opposition.
Putin, speaking in Ankara on December 1 after talks with Turkish President Recep Tayyip Erdogan, said that instead of the South Stream pipeline Russia and Turkey may instead build a gas hub for southern Europe near the Turkish border with Greece.
The South Stream pipeline -- which would have cost several billion dollars -- was to run under the Black Sea to Bulgaria and further to Greece and Italy as well as to Serbia, Hungary, and Austria.
But Putin said it cannot be built due to the Bulgarian government's opposition and EU charges that South Stream does not comply with EU competition and energy laws.
The Russian president criticized the "unconstructive position" of Brussels on South Stream.
Putin added that Bulgaria was being deprived of "behaving like a sovereign state" and should demand money from the EU for the profits it would have received from South Stream.
Gazprom CEO Aleksei Miller said the South Stream project "is closed" and said a new pipeline would be built to Turkey that would have the same capacity as South Stream.
Putin also announced that Russia has agreed to increase gas deliveries to Turkey via the Blue Stream pipeline by some 3 billion cubic meters while also reducing the price by 6 percent starting next year.
Erdogan praised relations with Moscow but did not mention the possible natural-gas hub with Russia or the redirecting of the South Stream pipeline to Turkey that Miller mentioned.
Turkey is the second-largest European importer of Russian natural gas after Germany.
Erdogan and Putin said they wanted to triple bilateral trade to $100 billion by 2020 and for Russia to build Turkey's first nuclear power plant at Akkuyu.
The two leaders also discussed the situation in Syria, where Moscow and Ankara's polices vary widely.
Russia is one of Syrian President Bashar al-Assad's closest allies and Russian has a naval base on the Syrian coast.
But Erdogan said at the December 1 press conference that when it comes to finding a resolution in Syria, "we have to consider Assad as though he does not exist. It is not possible to reach a solution with Assad."
Erdogan, who has supported the territorial integrity of Ukraine, said he welcomed pledges by Putin to ensure the rights of all Crimean residents, including the Turkic Crimean Tatars.
Several Crimean Tatar leaders, including Mustafa Dzhemilev, have been barred from Crimea since Russia's illegal annexation of the Ukrainian peninsula in March.
Several Crimean Tatar youths, journalists, and activists have also disappeared since Russia's takeover and many others have been detained and had their homes searched and items seized.
Human rights organizations and other watchdogs have reported a sharp increase in human rights violations in Crimea since Moscow's annexation of the territory.
With reporting by Reuters, AP, and Interfax