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27/08/2016

Putin: We haven’t given up the South Stream project

Europe's East

Putin: We haven’t given up the South Stream project

southstream2.jpg

On a visit to Hungary, Russian President Vladimir Putin made a U-turn, announcing that his country has not given up the South Stream pipeline project, which he had himself declared dead in December.

According to the transcript of his press conference with Hungarian Prime Minister Victor Orbán, Putin said: “We didn’t give up South Stream, we were not allowed to implement it.”

Russia recently abandoned plans to build the South Stream gas pipeline via the Black Sea to Bulgaria, and blamed Sofia for having obstructed the project.

>> Read: Russia says South Stream project is over

In Budapest, the Russian President explained that the main reason for abandoning South Stream was the uncertainty surrounding the Bulgarian stretch of the pipeline after the European Commission had asked Sofia to stop preparatory works on the project.

Work on the offshore section could not start due to the absence of a permit to reach the Bulgarian shore, Putin said.

Now the Commission is having second thoughts about the project and has asked the Russian side to reconsider Bulgaria for implementing it, Putin said.

Indeed, Bulgarian Prime Minister Boyko Borissov recently asked Commission Vice President Maroš Šef?ovi?, in charge of the Energy Union, to lobby Russia for re-launching the South Stream project.

>> Read: Borissov warns of Bulgarian energy ‘catastrophe’

On a visit to Moscow, Šef?ovi? did ask the question, but it was abruptly dismissed by Gazprom CEO Aleksey Miller who said the Russian gas monopoly now prefers Turkey over Bulgaria as a gas transit country.

>> Read: Russia says it will shift gas transit from Ukraine to Turkey

Good cop, bad cop

In fact, Miller and Putin may be playing good cop/ bad cop.

Speaking in Budapest, Putin suggested that Bulgaria could become part of the project again. But he explained that it was out of question to return to the initial South Stream project.

Russia has already announced that the gas would arrive in the “European” territory of Turkey – west of the Bosphorus strait – via an offshore pipeline. From there, the gas would flow directly to the Turkish-Greek border and reach Bulgaria from Greece, Putin said. 

“We have no intention to punish or to feel offended” about the EU’s change of heart regarding South Stream, Putin said, stressing the outcome would depend on the European Commission, which “yesterday gave up, tomorrow agrees, and after tomorrow may give up again”.

Putin made it plain that Russia would not abandon its plan to pipe its gas to Turkey. “We will not refuse to cooperate with Turkey. Not only because it would be indecent – we have agreed with our Turkish friends, how could we now say ‘no, we’ve got a better offer from Europe’ – that would put us in a stupid situation,” he said.

Putin suggested that from Bulgaria, South Stream could follow its initial route to Serbia, with a branch to Hungary and Austria, ending up in the Baumgarten gas hub near Vienna. Baumgarten was the planned final destination of Nabucco, a now abandoned EU pipeline project to bring Azeri gas to Western Europe.

Background

South Stream is a Russian-backed natural gas pipeline. The main aim of the pipeline is to bypass Ukraine, seen by Moscow as an unreliable transit country.

According to initial plans, the pipeline would run under the Black Sea to Bulgaria, and continue through Serbia with two branches to Bosnia and Herzegovina and to Croatia.

From Serbia the pipelines would cross Hungary and Slovenia before reaching Italy. Its planned capacity is 63 billion cubic metres per year (bcm/y).

Later, Russia changed its plans and said the 63 bcm/y would be sent to the Turkish-Greek border via an alternative “Turkish Stream” pipeline from Russia to the European shores of Turkey at the Black Sea.