EU Flags South Stream Venture Agreement
The European Union regulator urged Bulgaria to amend its South Stream natural gas pipeline agreement with Russia to conform with EU law and make sure third parties are given access.
“We would like to see that stated very clearly in the intergovernmental agreement,” Marlene Holzner, the European Commission energy spokeswoman, told a briefing in Brussels today. The EU sent a letter to the government in April, recommending it include private gas traders in the project.
The European bloc wants more competition in its energy markets and less dependence on Russian gas imports. OAO Gazprom signed an agreement with Bulgaria’s Energy Holding during Prime Minister Vladimir Putin’s visit to Sofia for a 50-50 partnership to operate the Bulgarian section of the planned pipeline to Europe.
The agreement is a step forward after the two countries signed an intergovernmental agreement in 2008. Construction of the link is slated to start in 2013 and it may carry 63 billion cubic meters of gas a year to the European Union under the Black Sea via Bulgaria, bypassing Ukraine.
Last year, Gazprom shipped 13 billion cubic meters of gas through Bulgaria to Greece, Turkey and Macedonia via the Soviet- era pipeline that passes through Ukraine and Romania, Gazprom Chief Executive Officer Alexei Miller said on Nov. 13.
Bulgarian Economy and Energy Minister Traicho Traikov said that South Stream will bring Bulgaria about EUR 1 B in transit fees annually, which is about 3% of the country's GDP.
"South Stream is a project which has all chances to become successful and profitable for Bulgaria, which is why the state is actively committed to it so that it can be structured in a way corresponding to our national interests," Traikov declared.
Bulgaria also backs the OMV AG-led Nabucco pipeline project, which aims to bring gas from the Caspian Sea region and the Middle East to Austria via Turkey, reducing Europe’s reliance on Russian fuel.
“Nabucco is our priority because it helps to diversify the sources of gas supply,” Holzner said today. “In this respect, South Stream is a very important project, but in comparison with Nabucco it doesn’t offer diversified gas resources. It is a new transit route.”
Source: Bloomberg