Bulgaria halts work on South Stream gas pipeline
The $73 billion South Stream project planed to bypass Ukraine to transport Russian natural gas to the European Union.
Bulgaria's prime minister has ordered on Sunday a halt to construction work on the Gazprom-led South Stream pipeline project planned to bypass Ukraine as a transit country and consolidating Russia's energy grip in Europe.
Plamen Oresharski said after meeting U.S. Sens. John McCain, Christopher Murphy and Ron Johnson that he has ordered all work on the disputed project to continue only after consultations with Brussels.
Bulgaria's prime minister Plamen Oresharski
Last week, the European Commission opened an infringement procedure against the Balkan country and asked construction work to be stopped, arguing that Bulgaria hadn't respected EU internal market rules covering the award of public contracts.
The standoff over Ukraine has forced the 28-nation EU into a sudden rethink of its energy policies to make it less reliant on Russia and its state-owned gas company Gazprom.
In particular, the EU decision will affect the South Stream pipeline, in which Russia's Gazprom holds a 50-percent stake, and would provide an alternative supply route for Bulgaria, Serbia, Croatia, Hungary, Slovenia, Austria and Italy. It is expected to ship up to 63 billion cubic meters of gas from 2018.
Bulgaria, which is almost totally dependent on gas supplies from Russia, is trying to avoid another cutoff after it was among those who suffered most of the gas price dispute between Russia and Ukraine in 2009.
Washington had already voiced criticism over Bulgaria's decision to award the construction of the Bulgarian stretch of South Stream to a consortium led by Russia's Stroytransgaz — a Russian company subject to U.S. sanctions.
In a statement on Friday, U.S. Ambassador Marcie B. Ries voiced "deep concern" over the decision.
"Now is not the time for business as usual with Russia," she said. "We advise Bulgarian businesses to avoid working with entities sanctioned by the United States."
"We understand that there are some issues concerning the South Stream pipeline project," McCain said Sunday and added that "obviously we want as little Russian involvement as possible."
Radio Free Europe/Radio Liberty: 9 June 2014
Bulgaria Suspends Work On South Stream Pipeline
Bulgarian President Rosen Plevneliev welcomes US Senators John McCain, Senator Christopher Murphy and Senator Ron Johnson prior to their meeting in Sofia on June 8, 2014
Bulgarian Prime Minister Plamen Oresharski has announced that Bulgaria is suspending work on the disputed Russian-backed South Stream gas pipeline following criticism from the European Union and United States.
Oresharski, speaking after a meeting with U.S. senators, said, "I have ordered all work to be stopped. We will decide on further developments following consultations with Brussels."
Russia's Energy Ministry said that Moscow has not yet received any official notifications from Bulgaria about the suspension.
South Stream is a 2,380-kilometer pipeline planned to transport Russian natural gas to the EU bypassing Ukraine.
Gas disputes have marred relations between Moscow and Kyiv, including during the current crisis in Ukraine.
EU Pressure
Gas was to be pumped from 2015 to the Bulgaria’s Black Sea port of Varna before extending overland through Serbia, Hungary, and Slovenia to supply gas to Western Europe via Italy and Austria.
Proposed South Stream pipeline route, according to Gazprom
The EU has warned Moscow that the pipeline breaks the bloc's rules, notably when it comes to a planned monopoly of Russia's Gazprom over it.
The European Commission, the 28-nation bloc's executive, has also stepped up pressure on member Bulgaria, laying the groundwork for an EU infringement procedure that could eventually result in hefty fines for Sofia.
The commission is concerned that the contracts for the Bulgarian portion of South Stream were not awarded transparently.
Bulgaria, which joined the EU in 2007, is nearly totally dependent on Russian gas.
The South Stream dispute is likely to be discussed on June 9, when officials from Ukraine, Russia, and the EU hold talks in Brussels in an effort to resolve Kyiv's natural-gas debt to Moscow.
A Russian Energy Ministry official said the three sides will also negotiate a price for Ukraine's gas imports from Russia.
Russian gas giant Gazprom nearly doubled the price of natural gas for Ukraine after the February ouster of President Viktor Yanukovych, a Moscow ally.
Ukraine has insisted on paying $268.5 per 1,000 cubic meters for Russian natural gas, while Moscow has said the price was increased to $485 per 1,000 cubic meters.
Ukrainian Prime Minister Arseniy Yatsenyuk has threatened to take the issue to an international arbitration court in Stockholm if Moscow does not agree to the lower price.
But he said there could be a compromise on the price.
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