The South Stream and Energy Security in South East Europe Part III

The release of atomic energy has not created a new problem. It has merely made more urgent the necessity of solving an existing one. Albert Einstein On begining of march Alexey Miller, Chairman of the Gazprom Management Committee took part  in the South Stream Transport Supervisory Board meeting in Zurich (Switzerland). The Board members approved the signing of a contract for laying the first string of South Stream's offshore section and a pipe procurement contract for the second string of the gas pipeline offshore section. The contract for laying the first string will, among other things, envisage the landfalls infrastructure development and the construction of production facilities for four offshore gas pipeline strings in the shore crossing areas in Russia and Bulgaria. The standoff between the West and Russia over Ukraine may temporarily disrupt building the South Stream gas pipeline, but there is no long term threat to the project for now. The future of the 2400 km (1,490 mile) line from Russia via the Black Sea to Europe, avoiding Ukraine, has been cast into doubt after Russia's annexation of Crimea. Bulgaria, almost entirely dependent on Russian energy supplies, would be a major beneficiary of the pipeline. The Crimea crisis has prompted Bulgaria to speed up efforts to diversify its energy purchases. It has looked at buying liquefied natural gas (LNG) from Qatar or Israel, and has thrown its weight behind the construction of an LNG terminal in Greece. Nobody is putting the project under question, but of course in a time when political relations become more complicated this may affect the speed with which the solutions are to be found. EU sources say that Bulgaria’s “cheating” over South Stream is likely to trigger a heavy infringement procedure, unless Sofia backtracks. As planned, the South Stream gas pipeline would run under the Black Sea to Bulgaria, and continue through Serbia, with two branches to Bosnia and Herzegovina and to Croatia.  While Brussels had suspended talks with Moscow about the project, the technical studies being carried out for it had not stopped. The Bulgarian Parliament passed on a first reading amendments to the country’s energy law, according to which South Stream will be considered an interconnector, and not a pipeline. Thus, the Gazprom-favoured project would be exempted from the Third Package on energy liberalisation. The amendments were backed by MPs from the two parties forming the minority coalition government, namely the Socialist Party (BSP) and the ethnic Turkish Movement of Rights and Freedoms Party (DPS), as well as the extremist party Ataka, which supports the government.The opposition, the GERB party of former Prime Minister Boyko Borissov, voted against, with 64 MPs and 4 abstention. The leader of BSP Sergei Stanishev is also President of the European peoples’ Party. Ataka, which is described both as an extreme right and an extreme left force, is becoming more and more a mouthpiece for Russia, in Bulgaria. Recently, the party vowed to topple the cabinet if it backs a new round of Western sanctions against Russia over its annexation of Crimea . GERB MP Delyan Dobrev, who is a former energy minister, said that he didn’t understand why his socialist colleagues did not wait for Brussels’ opinion before passing the law. Dragomir Stoinev Bulgarian Ministry of Economy and Energy stated all countries along the planned route of South Stream have united around the idea that work on the pipeline should go uninterrupted because of its strategic importance for the whole of Europe. He highlighted that Bulgaria has requested that the European Commission leads the ‘negotiations with Russia, so that all European countries along the South Stream route could receive simultaneously an approval, instead of leading negotiations by themselves. The total length of the offshore section will be around 900 kilometres, the maximum depth - over two kilometres and the design capacity - 63 billion cubic meters. There are two optional routes for the onshore gas pipeline section: either northwestward or southwestward from Bulgaria. In order to feed the required amount of gas to South Stream, Russia’s gas transmission system throughput will be increased through the construction of additional 2,446 kilometres of line-pipe and 10 compressor stations with the total capacity of 1,473 MW. This project has been named South Corridor and will be implemented in two phases before December 2019. Bulgaria is largely dependent on Russian gas resources, as it meets over 85 percent of its gas supplies from Russia's Gazprom, its only oil refinery is controlled by Russia's LUKOIL and its only nuclear plant operates two Soviet-build reactors that run on Russian fuel.