Putin, Borisov discuss South Stream
On 23 May, Russian President Vladimir Putin and Bulgarian Prime Minister Boyko Borisov discussed by phone several key energy issues, including the planned South Stream gas pipeline, the price of natural gas and negotiations on the settlement of money due for the newly built Russian nuclear reactor for the abandoned Belene nuclear power plant project. Borisov told reporters regarding Belene that Russian and Bulgarian experts are working hard, they argue and numerous claims for payments are presented which Bulgaria has not confirmed.
On 18 May, Bulgaria’s Ministry of Energy, Economy and Tourism in Sofia said Russian gas export monopoly Gazprom will sign an agreement to cut gas prices for supplies to Bulgaria by 11.1%. The price reduction was agreed on during a meeting in Moscow between Bulgarian and Gazprom officials earlier this week and the documents will be signed in May, the ministry said on its website.
Gazprom pumps 17.8 billion cubic metres of gas a year to Bulgaria, about 3.5 billion cubic metres of which is consumed there. The rest goes on to Turkey, Greece and FYROM under a 30-year contract signed in 2006.
On 19 May, Borisov reiterated his country’s support for South Stream, noting that the Russian-backed gas pipeline is a project of high priority for Bulgaria. Borisov has pointed out the financial benefits of projects like South Stream that make use of his country's geostrategic location.
“It’s very rare for Gazprom to make concessions on its gas pricing without something in return and I’m not really sure what that ‘something in return’ might be,” Julian Lee, senior energy analyst at the Centre for Global Energy Studies (CGES) in London, told New Europe on 24 May.
The South Stream pipeline is intended to transport up to 63bn cubic metres of Russian natural gas to Central and Southern Europe annually, diversifying Russian gas routes away from transit countries such as Ukraine.
The pipe 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.
“We’re seeing a general sort of shift at the moment in the region of countries that are favouring South Stream. There is a realisation that Nabucco is not going to happen, at least in its original form. Although there will still presumably be large volumes of Azerbaijani gas probably crossing the Balkans. It may not go through Nabucco but it will go through TANAP and whatever carries gas onwards from the western end of Turkey,” Lee said. “But I think supporting or at least voicing support for South Stream is no longer perhaps seen as undermining Nabucco because I think the idea of Nabucco has largely evaporated now.”
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