Bulgarian PM Calls for Detailed Review of South Stream
Bulgaria's caretaker Prime Minister, Marin Raykov called for a new and more in-depth analysis of the Russian-sponsored South Stream gas pipeline project.
Speaking Wednesday at the regularly-scheduled meeting of the caretaker government, Raykov asked his ministers to organize a round table on South Stream.
"I think we need to review in detail this investment project since we are all aware that there are some sensitive issues around it," he stated.
The South Stream pipeline is intended to transport up to 63 billion cubic meters of natural gas to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine. Construction started in December 2012 in Russia.
The pipes will go from Russia to Bulgaria via the Black Sea; in Bulgaria it will split in two – with the northern leg going through Serbia, Croatia, Hungary, and Slovenia to Austria and Northern Italy, and the southern leg going through Greece to Southern Italy.
The Black Sea underwater section of South Stream between Russia and Bulgaria will be 900 km long, and will be constructed at a maximum depth of 2 km.
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.
The pipeline is expected to carry the first gas supplies before 2015 and reach full capacity in 2018, providing 10% of European gas supplies.
Bulgaria recently committed itself to speeding up the construction of the Russian-sponsored pipeline on its territory, since on January 1, 2013, the EU introduced new requirements for the access to energy networks.
The gas pipeline is expected to cost a minimum of EUR 16 B, of which EUR 3 B are to be paid by Bulgaria and be funded by a loan from Russia. The loan will be repaid by Bulgaria giving up on transit fees for 15 years.
A number of experts have already questioned the profitability of the pipeline on the backdrop of increasing competition and reduced interest in Russian gas supplies in Europe. Some also add Russia's attempt to circumvent the Ukraine at all costs makes South Stream more of a political than a business project.
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