South Stream Bulgaria has announced it will suspended all public procurement activities and will not sign contracts related to the South Stream gas pipeline.

In a message to the media quoted by the website Dnevnik.bg, the Bulgarian-Russian joint venture has cited a recommendation from the European Commission to be behind the move.

South Stream Bulgaria's decision was followed by a statement on the website of the Bulgarian Energy Holding (BEH), the company which has the Bulgarian 50-percent stake of the leg.

Earlier on Monday it was revealed that the joint venture had decided to raise its capital 25 times, or to BGN 397.6 M, in accordance with a decision taken by former Economy Minister Dragomir Stoynev.

The increase was entered into Bulgaria’s Commercial Register on August 18 in violation of an order Stoynev's interim Successor, Vasil Shtonov, issued a week earlier to freeze all activities relating to the implementation of the project until the project was brought in compliance with EU regulations.

In June the EU Commission started an infringement procedure against Bulgaria over a number of "irregularities" in the pipeline's Bulgarian section.

Former Prime Minister Plamen Oresharski subsequently heeded calls from Brussels to freeze the project until discrepancies have been smoothed out.

However, reports of ongoing activities related to the construction have cast suspicions about whether the project has effectively come to a halt.

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