Bulgarian PM Upbeat about South Stream Pipeline Profits

Business » ENERGY | July 10, 2010, Saturday // 03:47
Bulgaria: Bulgarian PM Upbeat about South Stream Pipeline Profits Bulgaria's PM Borisov sees South Stream as a very profitable project. Photo by BGNES

Bulgaria stands to benefit a lot from the construction of the South Stream gas transit pipeline, according to Prime Minister Boyko Borisov.

Speaking in an interview for the Bulgarian National Television dedicated to the first year of his term as Prime Minister, Borisov said Bulgaria was working actively on the Russian-sponsored energy projects that it deemed are in its interest.

“The South Stream project is going to provide natural gas for Western Europe, and if we invest USD 400 M in it now, we are going to receive transit fees till the end of our lives,” stated the Prime Minister.

“The Deputy CEO of Gazprom Alexander Medvedev will be in Sofia for talks on Thursday, which is when Bulgargaz and Gazprom will sign a “road map” for the South Stream project,” he reminded.

Borisov explained that under the new agreement Gazprom will continue to transit the same amounts of natural gas through Bulgaria to Greece and Turkey using the existing pipes, or about 17 billion cubic meters annually. From this Bulgaria will be profiting about USD 100-105 M per year.

The new pipelines on Bulgarian territory constructed specially as part of South Stream will transit about 14 billion cubic meters as the existing agreements are for 31 billion cubic meters annually. From this transit Bulgaria will get 50% of the fees as the new pipes will be owned 50/50 together with Russia.

The Prime Minister pointed out, however, that the Russians would like to increase the capacity of South Stream up to 63 billion cubic meters of natural gas annually, which means twice as large profits from the transit fees for Bulgaria.

“I have set conditions on the state company Bulgargaz to make a new gas supply contract directly with Gazprom, without any intermediaries,” declared the PM at a time when the Bulgarian company is involved in talks with Russia asking for lower gas prices and for eliminating the gas trade intermediaries.

With respect to the diversification of Bulgaria's energy sources, Borisov said that the country recently signed a contract with Turkey for the delivery of liquefied natural gas, and that the EU Funds Minister Tomislav Donchev is in Brussels and seeking funding for the building of a Bulgarian liquefied natural gas terminal.

Bulgaria is also working to connect its gas pipeline network with those of Romania and Greece.

Russia is aware that we are no Ukraine, Belarus, or Georgia. We are member states of the EU and NATO. Russian Prime Minister Putin knows very well that we are an European country, and that they have to negotiate with us that way,” declared Borisov.

With respect to the project for the construction of the second Bulgarian nuclear power plant at Belene, Borisov said the state had paid EUR 300 M in advance for the first Russian reactor, and another EUR 280 M had to be paid before the end of this year for the same reactor.

Borisov has also once again suggested the Burgas-Alexandroupolis oil pipeline will not be realized.

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Tags: South stream, South Stream gas pipeline project, natural gas, Russia, Gazprom, Bulgargaz, gas transit, Belene NPP, Boyko Borisov

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