The Russian president says Moscow cannot continue with the construction of the South Stream pipeline to deliver gas to European countries.
Vladimir Putin made the remarks at a news conference with his Turkish counterpart, Recep Tayyip Erdogan, in the Turkish capital, Ankara, on Monday.
He said the implementation of the 930-kilometer project would not go ahead after Bulgaria blocked construction under the Black Sea.
"Taking account of the fact that until now we have not received permission from Bulgaria, we believe that in the current conditions Russia cannot continue with the realization of this project," he said.
In October last year, construction work on the South Stream project began in Bulgaria, but it was suspended in June after the European Commission warned that it may be breaking EU competition rules.
The pipeline was to flow underneath Turkey's waters and through the Balkans to connect with the main European pipeline network, providing another transit route for Russia's state gas giant, Gazprom.
Elsewhere in his comments, the Russian president censured the European Commission's non-constructive approach to the implementation of the South Stream project, stressing that Moscow would redirect gas deliveries to other regions.
"We believe that the position of the European Commission is not constructive. In fact rather than helping the project, the European Commission is creating an obstacle."
Putin further announced that Russia had agreed to increase gas exports to Turkey by 3 billion cubic meters.
The remarks come as relations between Russia and the West have been hit by the ongoing crisis in Ukraine. The United States and the EU have imposed several rounds of punitive measures against Moscow over the conflict in the former Soviet state, targeting Russia’s banking, energy, and defense sectors. The Kremlin, for its part, has also imposed retaliatory bans.