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Bulgarian president calls for halt to South Stream project

The statement followed reports about the Bulgarian Energy Holding to prepare the decision on a contract with Russia’s Gazprom for a loan to finance Bulgaria’s participation in the project

SOFIA, July 22, 22:11 /ITAR-TASS/. Bulgarian President Rosen Plevneliev said on Tuesday that all activities related to the South Stream gas pipeline project should be put on hold until it was brought in line with European legislation.

The statement followed reports about the Bulgarian Energy Holding to prepare the decision on a contract with Russia’s Gazprom for a loan to finance Bulgaria’s participation in the project.

The president expressed surprise and indignation at the continuing project work by the government contrary to its public obligations assumed on June 8 to temporarily suspend the project, the presidential press service said.

Prime Minister Plamen Oresharski said earlier this month that Bulgaria would be able to convince the European Commission that its actions with regard to the South Stream gas pipeline project were justified and founded.

“South Stream will be. It’s not a Bulgarian project and I can only speak about what depends on us, not about the project as a whole, geopolitically,” he said.

The prime minister said Bulgaria had received the European Commission’s suggestions and had ordered all work on the project to be halted, primarily the signing of new contracts and agreements, until the two sides were sure that these suggestions were reasonable.

“We will try to convince the European Commission that we were acting correctly. We have enough arguments for that. But if we can’t do that, we will correct the actions the European Commission disapproved of. If we do not work out these issues now, we may face serious legal problems in the future,” he said.

Bulgaria is hoping to reap maximum benefits from the South Stream gas pipeline project, Minister of Economy and Energy Dragomir Stoynev said earlier.

“We should make maximum use of the South Stream project which is important for both Bulgaria and Europe and for which our country will not pay a single lev but we will create jobs, draw a profit and repay the loans for its construction through dividends,” the minister said.

Stoynev said South Stream “needs political support” and was the only project that could guarantee stable gas supplies. “Northern countries get gas from Nord Stream, and we should also have guaranteed supplies for southern countries from South Stream,” Stoynev said.

All participating countries have authorised the European Commission to conduct negotiations on the gas pipeline with Russia. “This is a strategic project for Europe and its construction should begin this year,” the minister said.

In his opinion, the best solution for Bulgaria would be having direct access to the gas supplier.

The contract to build the South Stream gas pipeline in Bulgaria is fully in line with European legislation, the Bulgarian Ministry of Economy and Energy said.

“The position of the ministry has been stated many times - the implementation of the South Stream project is important for Bulgaria both for diversifying gas supplies and from the economic point of view,” the ministry said.

“This is why during the talks with Russia in October 2013 Bulgaria, as an EU member state, could reach an agreement between the Bulgarian Energy Holding and Gazprom, under which the South Stream design company will make the gas pipeline capacity available for use by a third party as required by the Third Energy Package. This clearly shows compliance with our commitment to abide by European legislation,” the ministry said.

Stoynev said “the project will be implemented by European rules and will not violate European legislation” and stressed that “the work will be as transparent as possible”.

South Stream will be built across the Black Sea to South and Central European countries to diversify gas supplies to Europe and reduce the dependence on transit countries.

To build the onshore sections of the pipeline, Gazprom has signed agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia, and Austria.

The South Stream Offshore Pipeline will run through the Black Sea from Russia to Bulgaria and have a total length of 930 kilometres. An environment impact assessment (EIA) in accordance with national environmental legislation is being conducted in Russia, Turkey and Bulgaria. In addition, South Stream Transport is undertaking an Environmental and Social Impact Assessment (ESIA) in alignment with the standards and guidelines of international finance institutions. This will involve an ESIA Report for each Sector of the Project and a consolidated document for the entire South Stream Offshore Pipeline to ensure a consistent approach.

South Stream, initially conceived ENI and Gazprom, later joined by Electricite de France and German Wintershall AG, will eventually take 30 billion cubic metres of Russian natural gas a year to southern Europe.

The project stipulates for the offshore gas pipeline section to run under the Black Sea from the Russkaya compressor station on the Russian coast to the Bulgarian coast. The total length of the offshore section will be around 900 kilometres, the maximum depth - over two kilometres and the design capacity - 63 billion cubic metres. There are two optional routes for the onshore gas pipeline section: either northwestward or southwestward from Bulgaria.

In order to feed the required amount of gas to South Stream, Russia’s gas transmission system throughput will be increased through the construction of additional 2,446 kilometres of line-pipe and 10 compressor stations with the total capacity of 1,473 MW. This project has been named South Corridor and will be implemented in two phases before December 2019.

The offshore section of the pipeline, which will run in part along the seabed and reach the maximum depth of 2,200 m, will be 931 km long. Each of the four parallel strings of the pipeline will consist of 75,000 pipes, each 12 m long, 81 cm in diameter, 39 mm thick and weighing 9 tonnes.

The construction of South Stream started on December 7, 2012 is scheduled to be completed by 2015. The overall capacity of the marine section of the pipeline will be 63 billion cubic metres a year. Its cost is about 16 billion euro. The pipeline will go on onshore in the area of the Bulgarian city of Varna.

Gazprom’s share in the joint venture South Stream Transport B.V., which has been created to plan, build and operate the pipeline, is 50%, Italian ENI has 20%, French EDF and German Wintershall Holding GmbH each holding 15%