South Stream shareholders to seek control of capacity

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Shareholders in the South Stream gas pipeline plan to seek an exception to EU regulations in order to control up to 70 percent of the capacity and limit access to third parties, Bulgaria's energy minister said Tuesday.

"The joint company will ask the European Commission for a derogation" from new European plans aimed at liberalising the gas markets by forcing companies to separate their supply and production activities from network operation, Economy and Energy Minister Traicho Traikov told journalists.

The commission will be asked to "reserve 50, 60 or 70 percent of the capacity of the pipeline for its shareholders and liberalise the rest," he added.

On Saturday, Russian Prime Minister Vladimir Putin slammed EU plans to liberalise the gas market, warning that opening major gas transportation links to smaller players would hike prices and threaten the security of deliveries.

Putin's statement drew ire from Brussels, with European Commission energy spokeswoman Marlene Holzner urging Bulgaria and Russia to ensure third-party access to the pipes and to revise their 2008 intergovernmental agreement accordingly.

Under the accord, South Stream shareholders were to have full control over the pipeline's capacity.

Traikov confirmed Tuesday that the intergovernmental agreement would have to be amended if it had to conform with EU gas market liberalisation requirements -- due to come into force in March 2011.

The issue of amending this inital deal was not discussed during weekend energy talks between Russia and Bulgaria in Sofia but will be brought up in the future, Traikov noted.

On Saturday, the state-owned Bulgarian Energy Holding (BEH) and Russian gas giant Gazprom set up a 50-50 joint venture company to build the Bulgarian stretch of South Stream.

The pipeline will feed an annual 63 billion cubic metres of Russian gas to Europe with first deliveries expected at the end of 2015.

© 2010 AFP

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