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Bulgarian expert says Russia will not give up South Stream

December 02, 2014, 11:51 UTC+3
A deputy chairman of Bulgaria's energy commission says Russia's decision on South Stream is Vladimir Putin's tactical move
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Infographics Russian gas supplies to Europe: existing routes Russian gas supplies to Europe: existing routes


SOFIA, December 2. /TASS/. Russia's decision to give up the South Stream gas pipeline project and redirecting it towards Turkey is merely another tactical move by Russian President Vladimir Putin, deputy chairman of Bulgaria's energy commission Martin Dimitrov said in an interview with the NOVA TV channel.

The official commented on Vladimir Putin's recent statement running Russia cannot begin the implementation of the South Stream project. The Russian president said so on Monday after his meeting with his Turkish counterpart Recep Tayyip Erdogan in Ankara. Russia, according to the president, cannot begin the construction of the seabed section to the Bulgarian coast and is forced to revise its participation in the project.

Martin Dimitrov said that Russia by no means will abandon the South Stream project, and the statement is Vladimir Putin's tactical move. The official said that a possible redirection of the planned pipeline towards Turkey would make the project economically impractical. Dimitrov said the move aims at increasing pressure on Bulgaria and the European Commission.

Former minister says Bulgaria will end up in the position of the loser

“It is nakedly clear that Bulgaria will get no compensation for the suspension of the South Stream project and will find itself in the position of the loser. We must say “Thank you!” to Boyko Borisov (Bulgarian prime minister), who has over the past five years managed to suspend all three major infrastructure projects in Bulgaria, which could have drawn tremendous investments into the country and yielded major economic benefits,” Bulgaria’s former economics and energy minister, Rumen Ovcharov, has told TASS. “Turkey will now enjoy all economic benefits. As for us, theoretically speaking we may build an inter-system connector from Turkey to bring Russian gas to Bulgaria. I can see no extra opportunities for more talks. Russia has already displayed great patience,” Ovcharov believes.

Bulgaria’s former ambassador to Russia, Iliyan Vasilev, told the Bulgarian national television in an interview the Russian initiative may spark anti-European sentiment in Bulgaria.

Bulgarian officials have refrained from any comments on this “hot subject” so far. The government’s press-service has promised to make an official statement over the termination of the South Stream project later on Tuesday.

South Stream gas pipeline project

South Stream is Gazprom’s global infrastructural project of a gas pipeline system with a capacity of 63 billion cubic meters across the Black Sea stretching from Russia to countries of the Southern and Central Europe, including Hungary, Serbia, Slovenia and Austria.

Russia-EU dispute over Third Energy Package

In the autumn of 2013, the European Commission launched an anti-monopoly investigation into the South Stream project on suspicion that it disagrees with the rules of the EU’s Third Energy Package under which companies are supposed to separate generation and sales operations from transmission networks.

Last year, the European Commission urged to review bilateral intergovernmental agreements between Russia and EU countries to ensure that they comply with the Third Energy Package, which requires the separation of gas production, transportation and sale to prevent gas suppliers from dominating the infrastructure.

Russia insists the South Stream project should be exempt from the effect of the Third Energy Package because it signed bilateral inter-governmental agreements with the EU countries participating in the construction of the gas pipeline on their territory before the EU’s new energy legislation came into force.

Infographics Russian gas in Europe Russian gas in Europe
One-third of gas consumed in EU comes from Russia. Infographics ITAR-TASS
The Third Energy Package requires, in particular, that a half of the capacities of the pipeline built with Russian money must be reserved for independent suppliers, i.e. for cheap and free transit of Caspian gas to Europe independently from Russia.

Therefore, Russia does not recognize the legitimacy of applying the Third Energy Package to the South Stream gas pipeline project. If Moscow agrees to the EU’s proposal to consider exemptions for the South Stream gas pipeline as part of the Third Energy Package, this will mean that Russia will de facto recognize the legitimacy of using this ultra-liberal regulation.

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