Only days before a visit by Russian Prime Minister Vladimir Putin to Sofia, Bulgaria's Cabinet approved a joint venture to build and operate the Bulgarian section of the South Stream natural gas pipeline. The new business will be registered in Bulgaria and will be controlled on an equal-equity basis by state-held Bulgarian Energy Holding (BEH) and Russian gas giant Gazprom. The joint venture's capital will be sufficient to cover the respective stage of the project's development, Bulgarian Energy Minister Traicho Traikov said, without clarifying whether or not BEH will provide part of the funds.
Last week Bulgaria and Russia announced the launch of a tender for a feasibility study for the construction of the South Stream gas pipeline on Bulgarian territory, after months of uncertainty surrounding the project. The joint venture is expected to be signed when Russian Prime Minister Vladimir Putin visits Sofia on November 13. Putin will also discuss other large-scale energy projects in Bulgaria, including the Belene nuclear power plant and the Burgas-Alexandroupolis oil pipeline, with Bulgarian officials.
The South Stream gas transit pipeline is expected to be completed by 2015. It is estimated that its construction will cost between €19 billion and €24 billion. The pipeline will transport 63 billion cubic meters of natural gas annually, or 35 per cent of Russia's total annual natural gas export to Europe. In Bulgaria, the pipe is supposed to split in two, with one pipeline going to Greece and Southern Italy, and another going to Austria and Northern Italy through Serbia, Croatia and Slovenia. The project was initiated by Gazprom and the Italian company Eni, and the French company EdF has also indicated it may join as a shareholder. The pipeline is seen as a competitor to the EU-sponsored Nabucco project, which seeks to bring non-Russian gas to Europe.
News source: BalkanInsight link: article
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