South Stream May Stay in Limbo for Years, Analysts Say

Business » ENERGY | August 14, 2014, Thursday // 18:11| Views: 2028 | Comments: 1
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Bulgaria: South Stream May Stay in Limbo for Years, Analysts Say Photo: Wikipedia

The South Stream pipeline project designed to carry Russian natural gas to the European Union bypassing Ukraine will probably remain on hold for years, Bloomberg has reported.

According to  New York-based risk research group Eurasia, the proposed project is likely to “remain in limbo for years as Russia continues to foment armed conflict in eastern Ukraine and the EU retaliates with bans,” Bloomberg said.

The lack of available alternative route for Russian gas deliveries to Europe means Ukraine “will remain a key transit point for about half of Gazprom’s shipments to Europe,” according to Eurasia. With Russian troops massing near the border the EU “now has little choice but to stand united in opposition.”

Moscow’s support for armed separatists in eastern Ukraine and retaliatory bans on Russian food imports from the EU strengthen the bloc’s resolve to halt the project, according to Eurasia analyst Emily Stromquist, said Bloomberg.

It also quoted the opinion of Katja Yafimava, a senior analyst at Oxford Institute for Energy Studies, that “politically it’s very difficult for the Commission to support South Stream as this might be seen as depriving Ukraine of its leverage toward Russia. Equally difficult, though, it is for the European Commission to “block South Stream as long as it can’t ensure security of supply for its south east Europe members by other means.”

Bulgaria, where the proposed pipeline is supposed to enter the EU, relies almost 100% on Russian gas deliveries via Ukraine to meet its gas needs. In 2009, south east Europe, including Bulgaria, remained without gas supplies for nearly two weeks due to a dispute over gas prices between Moscow and Kiev.

With a design capacity of 63 billion cubic meters a year, South Stream remains a crucial part of Russia’s dream to eliminate Ukraine as a transit route, Bloomberg highlighted. Gazprom has already spent about USD 3.1 B on Russia’s domestic network to prepare for South Stream, and plans to invest at least USD 18.4 B more.

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#1
George Zhelyazkov - 15 Aug 2014 // 23:13:37

You see Novinite, this is what I've been saying all this time. Hurting Russia makes no sense. This hostility against Russia for no reason whatsoever makes no sense. Europeans will suffer, Russians will diversify and sell their oil and gas to China and we'll be left eating potatoes.

South Stream would have brought billions to Bulgaria. I even said here a few months ago that Bulgaria could become Singapore. An energy transit hub in the middle of a booming area.

You see Bulgarians, Russia is our friend and America our enemy. We have to understand that the more dependent we are on Russia the BETTER. Emerging markets offer pride, love and devotion. If you want development that you cherish and love then you must choose and do so quickly.

Get your head out of your asses Bulgarians and start moving to Russia. We must support our big brother by showing the big warm bear support when she most needs it. I can't move out of Hamilton because Ali my boss will fire me from 7-Eleven, but I urge all of you to stop being so stupid and MOVE!