With the sudden cancellation of the planned 2,446km South Stream pipeline from Russia to Europe the outlook for the long-delayed $3bn Galsi pipeline, from Algeria to Italy is looking up, but uncertainties remain.

Final investment decision on the Galsi project has been delayed from 30 November until 31 May 2015 due to the project’s failure to secure final planning authorisations from local and national authorities.

Whether or not the scheme will get the green light from the relevant authorities before the May deadlines remains to be seen, and even if it is granted the authorisations it needs for its success is not guaranteed.

While there is pent up demand for gas in Eastern Europe, overall demand in the region has been falling, with the bloc forecast to see a third year of declining consumption in 2014.

At the same time, there are concerns about Algerian gas production, which has been declining since 2005.

In July, Algeria announced that it would be spending $100bn to try and boost domestic production, but the country has a track record of failing to implement its impressive spending plans and many observers believe that the country will struggle to reverse its falling production.

Speaking in the wake of Russia’s decision to cancel South Stream, the High Representative of the European Union for Foreign Affairs, Federica Mogherini said Europe urgently needed to diversify both the routes and the sources of energy.

Galsi could well offer the energy security and diversification member states want, but both supply and demand concerns are likely to loom large when Galsi’s shareholders meet to make their decision in May.

South Stream wasn’t just a casualty of the political manoeuvring that surrounds the conflict in Ukraine, it also fell victim to Europe’s declining demand for gas and lower energy prices, two factors that also impact Galsi.