Sofia’s Latest Move to Halt South Stream “Could Be More Serious”
The announcement that Bulgaria has halted work on the South Stream project “could be a bit more serious” than the previous one, a gas analyst has commented.
The project company South Stream Bulgaria equally owned by state-run Bulgarian Energy Holding (BEH) and Russian gas giant Gazprom on Tuesday said it has suspended all public procurement activities and will not sign contracts related to the gas pipeline project.
The move followed an earlier announcement by the Bulgarian energy ministry that the project company has increased its capital in defiance of orders to the contrary issued by caretaker energy minister Vasil Shtonov.
"The government had already announced a suspension of South Stream in June, but in practice activity seemed to continue,” the BBC quoted global gas analyst at the economic research firm IHS Laurent Ruseckas as commenting.
“The current announcement could be a bit more serious, although time will tell," he added.
In June, the European Commission launched an infringement procedure against Bulgaria over the way the country is handling the South Stream project and demanded it be frozen until it complies with EU law.
Ruseckas also highlighted that Bulgaria, which is almost entirely dependent on Russia to meet its gas needs, is now faced with a difficult dilemma.
"Bulgaria has been strongly supportive of South Stream, which will give it greater security of gas supply - but as the situation in Ukraine has deteriorated, it has come under increasing pressure from Brussels to stop co-operating with Gazprom on the project,” Ruseckas said.
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