Gazprom Swaps Bulgaria for Romania in South Stream - Report

Energy | June 17, 2010, Thursday // 14:25|  views

Gazprom might abandon its plans to run South Stream through Bulgaria, and might go for Romania instead. Map by wordpress.com

Gazprom is already technically prepared to drop Bulgaria and to pick Romania for its South Stream gas transit pipeline project, according to Russian paper Kommersant.

“Bulgaria, which has practically given up on building the Belene NPP and the Burgas-Alexandroupolis oil pipeline in partnership with Russia, may now also lose the South Stream gas pipeline project,” the paper says.

According to the article entitled, “South Stream Is Going North – It Might Enter Europe through Romania”, Gazprom has already prepared technical and economic surveys for the underwater part of the pipe that lead out of the Black Sea into Romania instead of Bulgaria.

The article comes a day after Gazprom and the Romanian government opened formal talks for the country’s inclusion in South Stream.

Wednesday’s meeting in Moscow was attended by Gazprom CEO Alexei Miller and Romanian Economy Minister Adrian Videanu as well as the heads of Romanian companies Romgaz SA and Transgaz SA.

The Kommesant paper points out that Gazprom had been planning a minor pipeline linking Romania to the main South Steam pipe, and reminds a statement of Alexei Miller from the spring of 2010 saying that Gazprom already had made an agreement with Bulgaria, and was certain that the pipeline will go to its territory straight from the Russian Black Sea coast near Novorosiysk.

Yet, the article stresses the statements of the Bulgarian government last week that amounted to giving up on the Burgas-Alexandroupolis oil pipeline and the Belene Nuclear Power Plant, and declaring the EU-sponsored gas pipeline Nabucco a higher priority than the Russian alternative South Stream.

It says the Russian authorities did react officially but Gazprom changed its position radically so as to start formal talks with the Romanians.

The Director of East European Gas Analysis Mikhail Korchemkin is quoted as saying Gazprom also has other disagreements with Bulgaria such as the latter’s insistence on a new gas supply contract eliminating two of the three existing intermediaries.

Korchemkin believes that there is a good compromise option to construct the South Stream pipeline in two directions – one going through Bulgaria to Greece and Southern Italy, and another one going through Romania to Serbia, Hungary, Austria, Slovenia, and Northern Italy. (Under the current plans, the pipe is supposed to split in two on Bulgarian territory circumventing Romania.)

He says that this option would be reduce the total length of South Stream and will make the project cheaper.

An anonymous source quoted by Kommersant acquainted with the technical and economic plans says the construction of the gas pipe through Romania to Slovenia and Italy will be more feasible than going through Bulgaria because it could be laid together with the Constanta-Trieste oil pipeline.

The source points out that if the underwater section of the pipeline leads to the Romanian Black Sea coast instead of the Bulgarian, it will be only 20-30 km longer.

The paper reminds that Romania has alternatives to working with Gazprom such as the recent deal it made with Georgia and Azerbaijan for natural gas supplies and liquefied natural gas terminals. Yet, Russian experts believe that South Stream will be more attractive to Romania than this deal.

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Tags: Romania, Gazprom, South stream, gas transit pipeline, pipeline, Alexei Miller, Adrian Videanu, Romgaz, Transgaz, Russia, Constanta-Triest oil pipeline

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