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Sofia signs up for Blue Stream
By Upstream staff
Russian President Vladimir Putin today secured a berth for Bulgaria in the €10 billion ($14.66 billion) South Stream pipeline project, which will expand Russian gas deliveries into southern Europe.
Putin and his team achieved the breakthrough in overnight talks with Sofia which, because of ownership disputes, had been reluctant to sign up for South Stream.
Prime Minister Sergei Stanishev said Bulgaria would sign the deal today, bringing the country €1.4 billion in cash and a role in a regional energy hub.
The South Stream project, proposed by Russian gas export monopoly Gazprom and Italy's Eni, is Moscow's challenge to a rival Nabucco plan to pipe Central Asian gas to the European Union and reduce the bloc's reliance on Russian energy.
Failure to reach a deal on Bulgarian participation would have been a major upset to Putin, whose two-day trip to Sofia may be his last foreign visit before stepping down.
To reinforce his negotiating position, Putin included in his delegation First Deputy Prime Minister Dmitry Medvedev, Gazprom's chairman and the man Putin hopes will succeed him.
South Stream's future had been uncertain because Bulgaria wanted a majority stake in the pipeline project going through its territory, while Moscow was unwilling to grant that.
Stanishev said Bulgaria had agreed to a 50% stake in a Bulgarian-Russian company which will own and operate the pipeline running through Bulgaria.
"With this project, Bulgaria's place on the energy map of Europe is guaranteed," Reuters quoted him as saying.
The pipeline, which will carry 30 billion cubic metres of gas under the Black Sea, will re-emerge on the Bulgarian coast to continue through one of two routes. It could pass through Greece and reach Italy, or pass through Romania, Hungary, the Czech Republic and Austria before arriving in Italy.
Nabucco is central to EU efforts to diversify gas supplies away from Russia after a political dispute between Moscow and Kiev in 2006 cut off exports via Ukraine. Russia supplies a quarter of the EU's gas.
Bulgaria, torn between proving its EU credentials and maintaining its renewed ties with Russia, is eager to diversify its gas sources by being a partner in Nabucco but is also attracted by South Stream because of lucrative transit taxes.
Putin arrived in Bulgaria yesterday.
Friday, 18 January, 2008, 09:10 GMT | last updated: Friday, 18 January, 2008, 10:21 GMT
