Sofia vows to speed South Stream, bids for lower gas price

6th July 2010, Comments 0 comments

Bulgarian Prime Minister Boyko Borisov pledged Tuesday to speed up work on Russia's South Stream gas pipeline project, in a move to secure cheaper gas deliveries.

After talks here with Russia's First Deputy Prime Minister Viktor Zubkov and Gazprom's deputy chief executive Alexander Medvedev, Borisov said the two countries had drafted "a road map" to accelerate work on the project, which is being built by the Russian gas giant and Italy's ENI.

"There are no open questions left (on South Stream) and in 2015, the pipeline should be a fact," Borisov said.

A preliminary project feasibility study and an environmental impact assessment were the first steps on the roadmap, to be signed next Thursday in Moscow, he added.

Progress on the 900-kilometre (560-mile) South Stream pipeline from Russia to southern Europe has been stalled over haggling as to how Sofia and Moscow would split ownership of the new pipelines going through Bulgaria.

Sofia's previous centre-left government always insisted on building new pipes for South Stream, and sharing them 50-50 with Russia.

But Borisov said on Tuesday the parties had agreed to use the current transit pipeline that already pumps Russian gas to Turkey and Greece.

"The existing Bulgarian pipelines, which are 100-percent owned by Bulgaria, will be used... except for a 90-kilometre stretch" linking the existing network to Romania, he said.

On the sections branching off towards Italy and Germany, Moscow and Sofia will split ownership 50-50, Borisov added.

Zubkov also expressed hopes that Sofia and Moscow would "soon set up the project company" for South Stream.

In turn, Borisov noted that Bulgaria wanted to review its contracts with three intermediary companies that supply it with Russian gas, hinting that they were hiking prices disproportionately.

Bulgaria is 70-percent dependent on Russia for its gas.

"Our desire is to drop the intermediaries and have direct contracts" with Gazprom, he said.

"Russia delivers gas to Bulgaria at an average price of 339 dollars per 1,000 cubic metres," Zubkov noted, adding that Gazprom had data that showed some consumers were paying between 472 and 576 dollars for the same.

This "seems too much," he said, adding that Borisov was "perfectly right to raise the issue."

Zubkov also said he would inform Russian Prime Minister Vladimir Putin that "in this complicated economic situation we could indeed take steps to review the prices more carefully."

© 2010 AFP

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