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GAS : SOUTH STREAM A PIPE DREAM FOR BULGARIA?

The South Stream project seems to be dead in the water before it ever got started. "Talks between Russia and the EU will continue at technical level, but as soon as sanctions against Russia are in force, it's over," a source close to a bidding party in Bulgaria, where the gas pipeline project is supposed to be constructed first, told Europolitics. Energy "There will be no business."

Russia has started work on South Stream, which would bypass Ukraine and would supply the EU with 15% of its gas requirements by 2018. However, with a conflict growing between the EU and Russia over Crimea ahead of a "referendum" on the status of the peninsula set for 16 March, the long-term prospects of an energy partnership appear to be fading quickly. "After the experience with Crimea the EU will certainly not be inclined to heighten its dependence on Russian gas," the source said.

Bulgaria's government has so far remained tight-lipped on the issue. The Socialist Party, which leads the coalition in Sofia, is suspected of having close ties with Russia's energy companies. Consequently, a visit by Bulgaria's Foreign Minister Kristian Vigenin to Kyiv has elicited critical remarks from members of the coalition parties, who would prefer a more cautious approach to the new Ukrainian leadership in order not to provoke Russia. Memories of the winter of 2009 are fresh when Russia's Gazprom disrupted gas supplies to Ukraine, causing major outages in Bulgaria as well.

Construction permits are due to be issued this month to the successful bidder from the three pre-selected Bulgarian-Russian consortia. Lawmakers in the parliament in Sofia are currently trying to find a formula that would define Bulgaria solely as an "interconnector" in the South Stream project. This would remove South Stream - or so they hope - from the scope of the EU regulations.

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Publication:Europe Energy
Geographic Code:4EXRU
Date:Mar 26, 2014
Words:303
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