The implementation of the pipeline project South Stream continues on schedule and construction will start in early December 2012, representatives of Gazprom announced on Tuesday (May 22) after a meeting of the Board of Directors of the Russian gas holding company. The meeting discussed the progress of work on land and the underwater section of the pipe, and emphasized on the work with foreign partners to provide conditions for making a final investment decision.
The new schedule had been set by former Prime Minister and current President Vladimir Putin in December 2011 but as it seems, the Russians will stop at nothing to implement it.
Bulgaria will also need to comply with the marching step of Moscow, because if it delayed the construction of the South Stream pipeline it can remain without the promised by Gazprom 11.1% discount in the price of natural gas for the period 1 April to 31 December 2012. This was clear from the statement of Minister of Economy and Energy Delian Dobrev at the start of the week.
In an interview with the Bulgarian National Television, he explained that the depreciation of natural gas is tied to Sofia making a final decision by 15 November. The Russian side hopes by the end of this year to begin construction in the marine part of the Black Sea where the gas pipeline South Stream passes through. If Bulgaria doesn’t hurry up with procedures such as a detailed development plan, environment impact assessment, it would delay the entire project. This is why it is so important to keep deadlines, and this is the road map, which is consistent, Mr. Dobrev explained.
In fact, what has already been completed is the work on the feasibility of the underwater section of the South Stream and the sections located in Bulgaria, Serbia, Hungary and Greece, plus the diversions to Republika Srpska in Bosnia and Herzegovina and Croatia. In the words of former Deputy Minister of Economy, Valentin Nikolov, the contract for construction of the pipeline South Stream on Bulgarian territory has been sent to Brussels. All materials contained in it are synchronized and the project company – owner of the pipeline that will pass through our territory, may request specific derogation for third party access to the pipeline, as the new European Union rules require. But it is not at all certain whether it will receive it.
In practice, however, the games around South Stream answer the question why the promise for a discount price of natural gas was given so slowly by the Russian side. Last week, after the visit of Minister Dobrev and the Executive Director of Bulgargaz Dimitar Gogov in Moscow, the Bulgarian Ministry of Economy promised that agreements for it will be signed in a few days. But that never happened.
According to Russian newspaper Kommersant preferential price from Gazprom has yet to be calculated and the cheapening of the gas will not be calculates against the cost of supplies from last year, but compared to the average price of gas supplies to Bulgaria from April to December this year. Only then will it be granted to Sofia retroactively.
Another thorny issue between Bulgaria and Russia remains the new contract for the supply of natural gas and especially whether it will leave out the current intermediaries – Overgas and Wintershall.
According to Mr. Dilyan Dobrev during his latest visit to Moscow the contract period of the agreement starting from 2013 has been discussed to be five, six or seven years with an option to be extended for the same period and under the same terms in case of mutual consent.
This enables Bulgaria, after this medium-term contract expires, to look for alternatives and to focus its efforts on local production, contracting the best possible conditions for the take or pay clause for the ordered quantities of fuel, said Mr. Dobrev. All these details, however, are yet to be specified.
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Bulgarian Parliament ratified on Tuesday (May 22) the agreement to support the project for construction of the pipeline Nabucco between Bulgaria, the international project company Nabucco Gas Pipeline International and the company to build the pipeline on Bulgarian territory – Nabucco Gas Pipeline Bulgaria. The passed document certifies the will of individual companies to be using the Nabucco pipe to apply all international technical and environmental standards; it also defines the rules for investing in the construction, operation and utilization of capacity of the pipe, determining also the procedures for resolving disputes.
