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South Stream suspended under US pressure to EU's detriment - experts

June 10, 2014, 18:36 UTC+3 Zamyatina Tamara

MOSCOW, June 10. /ITAR-TASS/. Bulgaria has suspended construction of the South Stream pipeline by the Russian gas monopoly Gazprom in its territory under direct pressure from Washington, say Russian experts. The US neither consumes Russian gas nor supplies shale gas to the EU, but has its own economic interests in Europe.

The Russian Foreign Minister Sergei Lavrov said on Monday a third force had interfered with the construction of South Stream: “Some countries that cannot be suspected of sympathizing with Russia’s partnership with the EU want to use this initiative to disrupt the energy dialogue.”

“It is in the US interests to preserve the Ukrainian gas transportation system as the key one for gas supplies to the EU, as a part of it will be held by US companies,” the director general of the Institute of Energy Strategy, Vitaly Bushuyev, told ITAR-TASS political analysis centre. “The US does not want Russian gas in Europe in order to stake out this place for its own shale gas in the future.”

“In terms of energy, neither the US nor the EU needs Ukraine without its pipelines. Hence all this fuss over South Stream, intended as an alternative to Russian gas transit to Europe through Ukraine,” a source from Gazprom’s management told ITAR-TASS on the condition of anonymity.

Experts describe the European Commission’s energy policy supporting the project’s freeze as short-sighted.

“It is exactly South Europe, for which South Stream is being built, that will be hit first,” believes the director of the National Energy Institute, Sergei Pravosudov. Non-implementation of the contract will benefit none except the US, believes an economist at the Russian Presidential Academy of the National Economy and Public Administration, Ivan Kapitonov.

In its claims against Gazprom Brussels formally refers to the so called Third Energy Package that prohibits upstream companies from transporting and distributing gas in Europe. According to the deputy director of the National Energy Security Fund (NESF), Alexei Grivach, the dispute had been a smoldering conflict until the US interfered recently.

“Washington is doing its utmost to upset the South Stream project halfway,” believes NESF Director Sergey Pikin.

Reuters reports the US Ambassador to Bulgaria Marcy Rice is concerned about the fact that the country had chosen for the pipeline construction the Russian company Stroytransgaz controlled by the companies of sanctioned Gennady Timchenko.

Experts say Bulgaria may fall first victim to the blocking of the project. In 2010, when Russia had to suspend gas supplies because of Ukraine’s overdue debt, Bulgarians were simply freezing in their homes. Bulgarian experts say on the condition of anonymity: “Arm twisting will continue until Bulgarian politicians recognize that they should first listen to their own citizens and protect Bulgarian interests instead of obeying external pressures we are witnessing now.”

“The US insists South Stream is blocked not only because of Stroytransgaz’s participation in the works. This is the tip of the iceberg,” a professor of the Gubkin Russian State University of Oil and Gas, Andrey Konoplyanik, told ITAR-TASS. “In reality, the US wants a new pipeline construction tender, so that the U.S. companies can also participate.”

“Senator McCain’s 'love' of Russia has long been an open secret, but the current conflict is dominated by economics rather than politics,” the expert believes.

State Duma member Vyacheslav Nikonov has described South Stream suspension as a result of “the US geopolitical attack”.

“It is no secret the US is going to intercept the Ukrainian pipeline system to supply shale gas to Europe in five or six years,” he told ITAR-TASS. “Therefore, Washington is blocking South Stream through pressures on the European Union.”

The new conflict is another period of disagreement over the Third Energy Package, where the last word is to be said by the countries interested in Russian gas supplies, that is Austria, Hungary, Italy and other EU states, Nikonov believes.

“Gazprom can lay part of South Stream through Turkey that does not fall under the Third Energy Package, or through Greece to Serbia, bypassing the territory of Bulgaria,” Nikonov believes.

NESF deputy director Grivach believes Gazprom can settle Brussels' formal claims, make the EU accept South Stream and thus have an unpleasant surprise in store for Washington.

Bushuyev believes the recent European Parliament election swept to power more “pragmatists that will be less eager to sacrifice economic benefits for the sake of politics”.

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