Italian energy services company Saipem said Thursday it received word from Gazprom its contract to build a natural gas pipeline through Turkey was cancelled.

The Italian company said it received official notice late Wednesday that its contract to build part of the South Stream natural gas pipeline for Europe was pulled under a termination for convenience clause.

"The termination for convenience is a standard contractual clause which provides for the termination of the agreement in the absence of a contractual breach, with compensation determined in accordance with the terms and conditions of the contract," the company explained.

Russian officials in mid-December confirmed South Stream, touted as the answer to European transit woes, was no longer viable as envisioned in 2007. Instead, Russian energy company Gazprom said Turkish Stream, a scaled-back version, would take its place in the Black Sea.

Fitch Ratings said last year the South Stream decision reflected low demand for additional natural gas volumes in the European market as much as it does frustration with Russia's role in the market. Austrian energy company OMV, a former South Stream consortium member, said it viewed the announcements as political in nature.

Saipem in a statement said it had a vessel in the process of mooring in Russian waters to start laying the steel for South Stream. Parent company Eni in December sold its 20 percent stake in South Stream to Gazprom.

There was no statement on the Saipem contract posted by Gazprom.

Russia meets about a quarter of the natural gas needs for the European economy. The majority of that runs through the Soviet-era transit network in Ukraine, where lingering debt issues and ongoing conflict present risks to traditional energy routes.

Gazprom officials this week met with existing and potential partners in the twin Nord Stream pipeline through the Baltic Sea to Germany. An expansion project would double the network's infrastructure by 2019.