Bulgarian Rulers Deny Secret South Stream Deal with Russia

Energy | November 2, 2012, Friday // 16:59|  views

GERB party MP Dian Chervenkondev has rejected the rightist opposition's claims about a secret deal on South Stream with Russia. Photo by BGNES

The governments of Bulgaria and Russia have not held any secret talks for the South Stream gas transit pipeline because there is an intergovernmental agreement in existence, declared Friday Dian Chervenkondev, MP from the ruling center-right party GERB.

Chervenkondev has thus refuted the claims of former Bulgarian PM and leader of the rightist opposition Democrats for Strong Bulgaria party Ivan Kostov who had alleged the Cabinet of GERB and PM Boyko Borisov had negotiated a secret deal for the signing of an agreement between Bulgaria and Russia on the construction of South Stream.

Kostov's party went further by posing seven questions about Bulgaria's participation in the South Stream gas transit pipeline project to the Borisov Cabinet.

Ruling party MP Chervenkondev retorted by stating that all EU countries that will host sections of the Russian-sponsored South Stream pipeline are in fact in favor of the diversification of the natural gas supplies for Europe, which still come primarily from Russia.

"I fail to understand why Mr. Kostov believes that whenever there is a project with Russian participation the Bulgarian interests are threatened. That is not the case," he stated in Sofia Friday, as cited by BGNES.

Chervenkondev assured that Bulgaria's Borisov Cabinet is working in coordination with the European Commission on the South Stream project.

He further noted that the stakeholders in South Stream have come up with an investment model, and that Bulgaria needs to assume its share from the final investment decision that is to be signed at the highest level after being presented by South Stream's consultant.

The ruling party MP added that the Borisov Cabinet is implementing the intergovernmental agreement that its predecessors from the Stanishev Cabinet signed with Russia for the South Stream project back in January 2008.

"There has been a confirmation and ratification since 2008 by the Parliament that Bulgaria will be a part of this project. Since 2008, there have been purely technical activities – the route of the pipeline, the entrance and exit points on Bulgarian territory, exploration work, an environmental impact assessment, which is now in force," said Chervenkondev.

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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Tags: South stream, gas pipeline, gas supplies, Gazprom, natural gas, Alexei Miller, gas transit pipeline, Black Sea, underwater, Delyan Dobrev, Economy Minister, Economy and Energy Minister, take-or-pay, Ivan Kostov, DSB, Democrats for Strong Bulgaria, Blue Coalition, secret talks, GERB, Boyko Borisov, Prime Minister, Dian Chervenkondev, MP, MPs


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