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EU Puzzled by Attempts to Accelerate South Stream

Business » ENERGY | October 30, 2012, Tuesday // 17:47| Views: 1982 | Comments: 0
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Bulgaria: EU Puzzled by Attempts to Accelerate South Stream Мap of Russian-sponsored South Stream

Recent attempts to accelerate the construction of the South Stream gas pipeline have reportedly puzzled high EU officials.

Attempts to accelerate the Gazprom-sponsored South Stream gas pipeline project will not circumvent EU antitrust and environmental obligations, European Commission sources have told EurActiv.

The deadline to sign the South Stream agreement is November 15th. In mid-September, Bulgarian Prime Minister Boyko Borisov publically announced that Russian President Vladimir Putin will travel to Bulgaria on November 9. Borisov noted then the documents for the South Stream gas pipeline were to be signed during the November 9 meeting.

EurActiv has noted that Putin was expected to attend the signing ceremony that will see the deal formally signed by Alexei Miller, Gazprom CEO, and Mihail Andonov, head of the Bulgaria Energy Holding (BEH). But Sofia now indicates that the Russian President will instead visit the country in December.

According to Bulgarian authorities, the construction of South Stream in Bulgaria will begin "around July 2013".

"Officials said that the route of the pipeline had already been determined, environmental impact assessments were ongoing, and that steps were taken for the project to receive construction permit by mid-2013," EurActiv has stated in its asrtcle entitled "EU puzzled by South Stream acceleration."

"However, details of the route have been kept secret, and it is hard to imagine how the environmental assessment could be ready in such a short timeframe. EU law requires that civil society groups, including environmental organisations, be consulted on such large construction projects, which has not been the case yet," the EurActiv article says.

"Regarding the pipeline's route, the government designated the city of Provadia, 50 km inland from the Black Sea city of Varna, as the entry point of South Stream to Bulgaria. This rather vague indication has fuelled speculation that authorities were trying to conceal the real entry point of the pipe at the Black Sea coast, with the intention of keeping environmental activists at bay."

On several occasions, the European Commission has indicated that it had not seen any blueprint for the South Steam project, and that it was "not possible" to build pipelines without having conducted a proper environmental impact assessment as required under EU legislation, the website has reminded.

EurActiv has pointed out that experts say it will be much easier for Russia to secure an exemption from EU rules if South Steam breaks ground before March 2013, when the EU's third energy liberalisation package comes into effect. Russian officials and the media have also repeatedly made reference to the March 2013 deadline.

But Commission officials contacted by EurActiv insisted that the electricity and gas directives, the two key pieces of the package, had to be transposed by EU countries by 3 March 2011 and were therefore already considered to be in force. The Commission has in fact already opened infringement procedures against member countries – including Bulgaria – which have not fully transposed the legislation into national law, the officials said.

Following the opening of infringement proceedings in September 2011 for non- transposition, Bulgaria has notified only partial transposition of the Third Energy Package Directives. Moreover, one other infringement procedure is still open on the Second Energy Package concerning the lack of transparency in conditions for third-party access to natural gas transmission networks and the lack of an adequate system of penalties in the event of breaches of the Gas Regulation.

The matter was referred to the Court of Justice by the College of Commissioners in November 2011 (see IP/11/1437).

The pipeline's core shareholders include Gazprom with 50%, Italy's Eni with 20% and Germany's Wintershall Holding and France's EDF with 15% each.

Gazprom has already established national joint ventures with companies from Austria, Bulgaria, Croatia, Slovenia, Greece, Hungary and Serbia to manage the onshore section of the South Stream pipeline.

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Tags: European Commission, South stream, Vladimir Putin, Boyko Borisov, Gazprom, Russia, Bulgaria, gas pipeline
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