Bulgaria has stopped all activities linked to the building of the South Stream gas pipeline project pending full compliance of the project with European Union law, Plamen Oresharski, occupant of the prime minister’s chair in the embattled Bulgarian Socialist Party cabinet, said on June 8 2014.
Oresharski made the announcement in Sofia after talks with three visiting United States senators, six days after it emerged that the European Commission was launching an infringement procedure against Bulgaria on suspicion that Bulgaria breached internal market rules on public procurement in picking Russia’s Stroytransgaz and a consortium of five Bulgarian firms to carry out construction of the Bulgarian section of the pipeline without a public procurement tender.
The US underlined its stance on June 6 with a statement by Washington’s ambassador in Sofia, Marcie Ries, warning that companies or individuals that provide material support to Stroytransgaz – the company to which Bulgaria awarded the contract to build the land section of the South Stream pipeline in the country – could be subject to US sanctions.
Oresharski, nominal head of a government that is teetering under enormous political pressure and that is widely expected to give way for long-demanded fresh elections some time before the end of 2014, said that he had ordered the suspension of all activities related to the start of South Stream while consultations with the European Commission were underway.
Responding to a question, he said that the work had been suspended in reaction to a letter from the European Commission notifying Bulgaria of the infringement procedure. The course of further work would depend on consultations with Brussels, Oresharski said.
Local media said that it had become clear that the three US senators – John McCain, Ron Johnson and Christopher Murphy – had expressed objections to the choice of Stroytransgaz as the builder of the Bulgarian land section of the South Stream gas pipeline, given that the company’s owner Gennady Timchenko, was subject to US sanctions because of Moscow’s illegal annexation of Crimea.
A report in Russia’s Kommersant said that Russia’s energy ministry commented that it had not been officially notified of the suspension of the South Stream construction project in Bulgaria, and intended to raise the issue during a June 9 meeting with European Energy Commissioner Gunther Oettinger.
Oresharski’s announcement also comes against a background of political defiance by the Bulgarian Socialist Party, current holder of the mandate to govern but which was again dealt an electoral beating in May 25 European Parliament elections, which had signalled that it wanted South Stream to proceed in spite of the European Commission’s stance.
Oresharski declined to say what the future would be of the contracts already signed in relation to South Stream.
Bulgaria has one month from June 2 2014, when the letter was sent giving notice of the infringement procedure, to answer all questions posed by Brussels regarding the South Stream issue.
On June 13, representatives of Oettinger’s office are due to arrive in Sofia for discussions on another problem related to South Stream, regarding statutory amendments to bring the scope of the project into line with the Third Energy Package.
Russian news agency RIA Novosti said that Gazprom declined to comment on the announcement of the suspension of work by Bulgaria on the South Stream project.