EU puzzled by South Stream acceleration

Attempts to accelerate the Gazprom-sponsored South Stream gas pipeline project will not circumvent EU antitrust and environmental obligations, European Commission sources told EURACTIV.

Sofia is expected to sign a definitive agreement with Russia's Gazprom on 9 November for building the South Stream pipeline across Bulgarian territory, according to local media.

As reported earlier, Russian President Vladimir Putin was expected to attend the ceremony that will see the deal formally signed by Alexei Miller, Gazprom CEO, and Mihail Andonov, head of the Bulgaria Energy Holding (BEH). But Sofia now indicates that the Russian President will instead visit the country in December.

Entry point kept secret

According to Bulgarian authorities, the construction of South Stream in Bulgaria will begin “around July 2013”.

Officials said that the route of the pipeline had already been determined, environmental impact assessments were ongoing, and that steps were taken for the project to receive construction permit by mid-2013.

However, details of the route have been kept secret, and it is hard to imagine how the environmental assessment could be ready in such a short timeframe. EU law requires that civil society groups, including environmental organisations, be consulted on such large construction projects, which has not been the case yet.

Regarding the pipeline's route, the government designated the city of Provadia, 50 km inland from the Black Sea city of Varna, as the entry point of South Stream to Bulgaria. This rather vague indication has fuelled speculation that authorities were trying to conceal the real entry point of the pipe at the Black Sea coast, with the intention of keeping environmental activists at bay.

On several occasions, the European Commission has indicated that it had not seen any blueprint for the South Steam project, and that it was “not possible” to build pipelines without having conducted a proper environmental impact assessment as required under EU legislation.

Why hurry?

Experts quoted by US intelligence company Statfor say it will be much easier for Russia to secure an exemption from EU rules if South Steam breaks ground before March 2013, when the EU's third energy liberalisation package comes into effect. Russian officials and the media have also repeatedly made reference to the March 2013 deadline.

But Commission officials contacted by EURACTIV insisted that the electricity and gas directives, the two key pieces of the package, had to be transposed by EU countries by 3 March 2011 and were therefore already considered to be in force. The Commission has in fact already opened infringement procedures against member countries – including Bulgaria – which have not fully transposed the legislation into national law, the officials said.

Following the opening of infringement proceedings in September 2011 for non- transposition, Bulgaria has notified only partial transposition of the Third Energy Package Directives. Moreover, one other infringement procedure is still open on the Second Energy Package concerning the lack of transparency in conditions for third-party access to natural gas transmission networks and the lack of an adequate system of penalties in the event of breaches of the Gas Regulation.

The matter was referred to the Court of Justice by the College of Commissioners in November 2011 (see IP/11/1437).

Background

South Stream is a planned natural gas pipeline running across the Black Sea to Bulgaria, with one branch going to Greece and Italy, and another one to Romania, Serbia, Hungary, Slovenia and Austria.

Russia recently announced that it would more than double its planned capacity from 31 billion cubic metres per year (bcm/y) to 63 bcm/y.

South Stream's website says the pipeline is "aimed at strengthening European energy security" by eliminating transit through Ukraine, as "another real step toward executing the Gazprom strategy to diversify the Russian natural gas supply routes."

Timeline

  • 9 Nov. 2012: Official signing ceremony for South Stream in Bulgaria
  • July 2013: Target date for starting construction in Bulgaria

Further Reading

Business & Industry