South Stream 'Could Have Crimea Threads'

Business » ENERGY | April 8, 2014, Tuesday // 11:38| Views: | Comments: 0
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Bulgaria: South Stream 'Could Have Crimea Threads' Bulgaria's Deputy Economy Minister Ivan Ayolov acknowledged that a "Crimean" shift in the South Stream gas pipeline project is possible. Photo by BGNES

Part of the South Stream gas pipeline could pass through Crimea, according to some Russian media reports confirmed by Bulgaria's Deputy Economy Minister.

Business outlet RosInvest has suggested that Gazprom would consider the move once the situation in Ukraine de-escalates.

Russia's state-owned energy concern is reportedly planning to place 3 out of its total 4 threads on Crimean soil and reduce (virtually twofold) its underwater section, which is worth EUR 10 M of of the total value, which amounts to EUR 16 M.

Citing draft documents, the website argues Russia's sea segment of the South Stream could start somewhere around Sevastopol, where the Black Sea Fleet is stationed.

The measure could be adopted to meet "new geopolitical reality", according to Ekspert Online, another Russian business website.

It would be difficult to persuade international partners of the project to re-negotiate terms of contracts already signed on the pipeline project.

Estimates by Ekspert Online nevertheless suggest that moving three threads of South Stream to Crimea could make the project cheaper, with Russia saving up to EUR 6.2 B (USD 8.5 B) and with prospects of further cost reduction for their parties to the deal.

On Tuesday, Bulgaria's Deputy Economy Minister Ivan Ayolov did not play down reports that "changes" to the gas pipeline are likely.

He repeated above-cited information that 3 of 4 threads of South Stream could be installed in Crimea, which was incorporated into the Russian Federation following a regional referendum on secession from Ukraine in mid-March.

Ayolov however dismissed information that the EU could freeze the project over renewed tensions in Ukraine's east.

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Tags: Ayolov, Ivan Ayolov, pipeline, Crimea, threads, South stream, Russia, Ukraine
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