Russia and Bulgaria will create a joint company for the execution of the South Stream gas pipeline project, announced Bulgarian energy minister Traicho Traikov Friday after negotiations with a Russian delegation headed by his Russian counterpart Sergey Shmatko.

The details have not been arranged yet during Friday's negotiations in the Bulgarian Black Sea city of Varna. Talks are set to continue Saturday, announced Traikov.

The deadline for the creation of the joint company is February 2011, according to the Bulgarian minister. The South Stream “Road Map”, which is yet to be signed, is going to include other deadlines and specific steps of the project.

Traikov also announced that the Bulgarian stretch of South Stream is going to cost USD 835 M. The entry point of the pipe is going to be near Varna, while the exact route and the infrastructure parameters are yet to be determined, added he.

Regarding negotiations on delivery of Russian gas to Bulgaria, Traikov said that there are “opportunities for understanding from the Russian side” regarding lower prices, but again said no specific conclusions were achieved. He nevertheless commented negotiations are progressing “well”.

Traikov further commented that while the Russian position is that other European countries are receiving gas at the same prices as Bulgaria, they have opportunities for deliveries of gas not only from Russia. He implied that since almost all of Bulgarian gas comes from Russia, Bulgaria will request lower prices.

Traikov was optimistic a solution to the issue will be achieved before expiry of current contracts (2010-2011).

He was ambiguous when asked whether Bulgaria would sign the South Stream Road Map if it doesn't get a lowering of gas prices.

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