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04/12/2016

‘South Stream’ to become ‘Bulgarian Stream’

Energy

‘South Stream’ to become ‘Bulgarian Stream’

Boyko Borissov

[European Commission]

Bulgarian Prime Minister Boyko Borissov said the defunct project of bringing Russian gas across the Black Sea to the EU known as ‘South Stream’ should be transformed into ‘Bulgarian Stream’, with 100% Bulgarian ownership over the pipes.

Speaking in the Bulgarian parliament yesterday (13 January), Borissov said the options for the supply of Bulgaria with Russian gas would be discussed on 27-28 January in Sofia, at a session of the Bulgarian-Russian intergovernmental commission for economic cooperation, which had not met for the last five years.

Borissov was quizzed by MPs over the fate of South Stream, the shelved pipeline project designed to carry Russian gas across the Black Sea to Bulgaria, and via Serbia, Hungary and Slovenia, to Italy (see background).

Borissov said that South Stream as such was now in history, and that instead, the priority was a gas hub called “Balkan” near the Black Sea port of Varna. This hub, according to Borissov, could be supplied by two offshore pipes from Russia with the capacity of 10 billion cubic metres of gas per year (bcm/y) each, plus gas from Azerbaijan and from local fields in Bulgaria and Romania.

Velizar Enchev, an independent MP, asked Borissov if ‘Turkish Stream’ could not be replaced by Bulgarian Stream. Turkish Stream replaced South Stream, but now this project also is defunct, against the background of tensions between Moscow and Ankara following the downing of the Russian jet near the Syrian border by the Turkish military.

“I am speaking precisely of Bulgarian Stream, not about a 50-50 project with a Russian company, but a project with 100% Bulgarian ownership of the pipes,” Borissov responded.

Indeed, “South Stream Bulgaria” was a company in which the Russian company would own 50% of the pipes across the Bulgarian territory.

“It will be Bulgarian Stream, if the Russian side agrees to sell its gas at our border, they are welcome. And we will abide by the Third Energy Package and the sanctions of the European Commission,” he said.

Borissov revealed plans to bring Russian gas across the Black Sea during the 17-18 December EU summit. The same summit however was the scene of a clash over the planned expansion of the Nord Stream 2 pipeline, which brings Russian gas to Germany across the Baltic Sea. Russia’s aim is to stop transiting gas across Ukraine, depleting the country of transit taxes to the tune of €3 billion per year.

>>Read: Borissov: I told Merkel Bulgaria plans pipeline similar to Nord Stream 2

>> Read: Tusk joins ‘Visegrad Four’ in attack on Nord Stream 2

Commentators quoted by Dnevnik, the EurActiv partner in Bulgaria, said that Russia was unlikely to embark on a project to bring gas to Bulgaria under the Black Sea, given the falling prices of energy and declining gas demand in Europe.

Russia, however, is believed to want to build the Burgas-Alexandroupolis oil pipeline, which would bypass the Bosporus. A package deal including both large infrastructure projects is likely to satisfy both Sofia and Moscow.

Background

The South Stream pipeline was designed to carry 63 bcm/y of Russian gas across the Black Sea to Bulgaria, and via Serbia, Hungary and Slovenia, to Italy. Its main shareholders were Russia’s Gazprom, and Italy’s ENI.

On 1 December 2013, Russia scrapped the South Stream pipeline project to supply gas to southern Europe, without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline.

>>Read: Russia says South Stream project is over

After Russian-Turkish relations deteriorated over the downing of the Russian warplane at the Syrian border on 24 November 2015, word is out that Russia may bring gas at the Bulgarian shore, just as under the South Stream project.

>>Read: Borissov: I told Merkel Bulgaria plans pipeline similar to Nord Stream 2