Bulgarian Rightists Pose 7 Questions over 'Secret' South Stream Deal with Russia

Bulgarian ex PM and rightist leader Ivan Kostov has declared 7 questions for the Borisov Cabinet over a future South Stream contract with Russia. Photo by BGNES

Bulgarian Prime Minister Boyko Borisov has promised to sign a contract with Russia for the construction of the South Stream gas transit pipeline in secret talks, former PM and rightist opposition leader Ivan Kostov claims.

Speaking on Friday, Kostov also warned that the European Commission might sanction Bulgaria financially over Bulgaria's South Stream deals with Russia because at the end of October 2012 the European Parliament and the EU Council made a decision, according to which all energy agreements must be referred to the EC before their signing.

That is why, Kostov's party, Democrats for Strong Bulgaria, which is also part of the so called rightist opposition Blue Coalition, has insisted that Prime Minister Borisov provide answers in Parliament to seven questions related to Bulgaria's alleged secretly negotiated contract with Russia over the proposed South Stream project.

DSB's question No. 1 is whether Bulgaria will be guaranteed the right to purchase natural gas from third parties and to transport it via South Stream.

Question No. 2 is whether Bulgaria has negotiated a natural gas price that is not bound to the price of oil derivatives, as the EC has insisted.

Question No. 3 is whether the future South Stream contract will do away with the "take or pay" principle in Russian natural gas deliveries. Kostov reminded that RWE Transgas, the leading Czech gas importer, just won a dispute with Russia's gas producer Gazprom over the pricing of gas contracts. An Austrian court ruled that the Czech company didn't have to pay for unused gas under the "take-or-pay" principle.

Question No. 4 is whether the Bulgarian government has adhered to EU's requirement for transit fee that state that transit fees should not be subjected to long-term contracts, and should not be dependent on the political relations between Russia and the receiving country.

Question No. 5 is who guarantees that South Stream will be transporting 63 billion cubic meters of natural gas annually, as it is technically supposed to, especially since similar Russian projects – Nord Stream and Blue Stream – have been transporting only 30% and 37% of the originally intended annual amount, respectively.

Question No. 6 is whether the Bulgarian government has come up with an environmental impact assessment for the route of the South Stream pipeline in Bulgaria, and whether all the necessary public discussions have been held as required by law.

DSB's question No. 7 is whether Bulgaria's Cabinet has now changed the intergovernmental agreement with Russia on South Stream signed by the previous Cabinet on January 18, 2008, since it is said to contradict EU law.

The South Stream pipeline is intended to transport up to 63 billion cubic meters of natural gas to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine. Construction will start in December 2012, and not 2013 as previously planned.

The pipes will go from Russia to Bulgaria via the Black Sea; in Bulgaria it will split in two – with the northern leg going through Serbia, Croatia, Hungary, and Slovenia to Austria and Northern Italy, and the southern leg going through Greece to Southern Italy. Recent reports have indicated, however, that Russian energy giant Gazprom may give up on the construction of the offshore section of the South Stream gas pipeline to Austria.

The Black Sea underwater section of South Stream between Russia and Bulgaria will be 900 km long, and will be constructed at a maximum depth of 2 km.

In order to service the supplies for South Stream, Russia will expand its own gas transit network by building additional 2 446 km of pipelines with 10 compressor stations with a total capacity of 1473 MW, a project to be called "South Corridor" and to be completed in two stages by 2019.

The construction of the South Stream gas pipeline will begin in December 2012, and the first supplies for Europe are scheduled for December 2015.

The pipeline's core shareholders include Gazprom with 50%, Italy's Eni with 20% and Germany's Wintershall Holding and France's EDF with 15% each.

Gazprom has already established national joint ventures with companies from Austria, Bulgaria, Croatia, Slovenia, Greece, Hungary and Serbia to manage the onshore section of the South Stream pipeline.

Bulgaria recently committed itself to speeding up the construction of the Russian-sponsored pipeline on its territory, since on January 1, 2013, the EU is introducing new requirements for the access to energy networks.

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