Bulgaria's South Stream Construction Price Could Soar - Report

Energy | July 10, 2014, Thursday // 12:13|  views

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The Bulgarian stretch of the South Stream gas pipeline could go beyond USD 5.86 B previously estimated, a Russian daily argues.

Vedomosti bases its conclusions on the announcement made this week that the section to be built in neighboring Serbia will be worth USD 2.1 B, or 23.5% more than the expected price.

Projected value of the segment in Serbia was USD 1.7 B in November 2013, according to Russian Economy Minister Alexander Novak.

Russian energy concern Gazprom's subsidiary Centrgaz, which signed on Tuesday an agreement with Belgrade to carry out the construction, has lately been pointed in media reports as a possible alternative to the current subcontractor in Bulgaria, Stroytransgaz.

Other reports suggested Centrgaz could decide to set up an office in Sofia at a meeting of its Board of Directors Thursday, July 10.

Vedomosti quotes a source related to Gazprom as saying it is a "usual" practice for the company to raise the cost of projects while working on them.

The daily thus claims that some EUR 3.5 B (USD 4.77 B) that are to be set aside for South Stream in Bulgaria (according to government estimates) could prove insufficient and potentially rise to EUR 4.3 B.

The gas pipeline project has recently come under fire, as the EU and Russia are embroiled in a dispute over the compatibility of South Stream with the rules of Europe's Third Energy Package.

While in Sofia on July 7, Russian Foreign Minister Sergey Lavrov openly called on the EU Commission to "exclude" the project from the common energy regulations, arguing the same measure is in force regarding a number of other pipelines.

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Tags: South stream, Bulgaria, Serbia, Centrgaz, Stroytransgaz, Alexander Novak, Russia, Gazprom, Sergey Lavrov, EU Commission, Third Energy Package


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