Bulgaria still keen on South Stream, Russian FM Lavrov told

In meetings with visiting Russian foreign minister Sergey Lavrov on July 7, Bulgarian officials trotted out the by-now-familiar line about Sofia’s continued interest in building the South Stream gas pipeline, provided the project meets EU regulations.

The Kremlin-promoted pipeline, meant to diversify Russia’s gas routes into Europe – and potentially cut Ukraine out of the lucrative transit business – has faced mounting opposition from both the European Commission and European Parliament in recent months, running afoul of the EU’s Third energy package regulations, which prevent gas traders from owning transport infrastructure.

Lavrov received assurances ranging from Bulgarian President Rossen’s Plevneliev’s “continued support for projects that increase energy security and diversification” to outgoing Prime Minister Plamen Oresharski’s pledge that the country “will continue to make every effort for [South Stream’s] implementation.”

Although Lavrov’s visit was ostensibly to mark the 135th anniversary since the establishment of diplomatic relations between Russia and Bulgaria, the issue of South Stream was widely expected to top the agenda of the talks.

In recent weeks, Bulgaria has become the fulcrum of the South Stream dispute after the country became the first EU member state to sign a contract for the construction of the pipeline, prompting the EC to open infringement proceedings because of suspicions that the EU’s public tender guidelines were ignored in the process.

Russia, for its part, maintains that the bilateral intergovernmental agreements – signed with individual countries that South Stream will cross – should trump EU’s internal rules and has recently asked for World Trade Organisation arbitration of the issue.

Speaking after meeting with his Bulgarian counterpart Kristian Vigenin, Lavrov said that EU rules should not be applied retrospectively to agreements made before the Third energy package went into force.

In Bulgaria’s case, the agreement was signed in January 2008, which was also the last time Lavrov visited Bulgaria. Then, as now, he was greeted by small crowds of protestors – although that time, their ire was directed mainly at Russian president Vladimir Putin, making one of his last foreign trips before stepping down at the end of his second term in office to attend the signing of several major joint undertakings in the energy sector.

Of those three projects, only South Stream remains standing now, with Bulgaria’s previous cabinet unilaterally pulling out of the proposed Bourgas-Alexandroupolis oil pipeline and shelving the plans to build a nuclear power plant at Belene, the latter prompting damage claims of more than one billion euro from Russia’s state-owned Atomstroyexport, the contractor picked to build the plant.

The timing of Lavrov’s latest visit drew criticism from the opposition in Sofia, with the centre-right Reformist Bloc claiming that Lavrov was meant to discuss the possible change of the main construction contractor for the Bulgarian section of the pipeline.

Reports in Russian media have claimed in recent days that Gazprom would hand the construction contract to one of its subsidiaries, Centrgaz, replacing engineering firm Stroytransgaz – owned by billionaire Gennady Timchenko, claimed to have a close relationship with Putin and, as such, subject to US sanctions stemming from the Russian annexation of Crimea.

(On the topic of Ukraine and Crimea, Bulgarian officials were restrained, with Oresharski saying Bulgaria supported Ukraine’s “territorial integrity” but also criticising authorities in Kyiv for scrapping the law granting regional language status to languages spoken by ethnic minorities, while Plevneliev underlined “the sovereign right of every country to decide on its future”, but made no mention of Crimea.)

The Reformist Bloc said that such a substitution would compound the breach of public procurement rules and called for a new tender to pick the construction company. The bloc’s spokesperson, Radan Kanev, said that the signing of an annex to the South Stream construction contract could explain the reason for Oresharski’s much-delayed resignation.

Another critic of the current administration, political commentator Ognyan Minchev – who had earlier described the Oresharski government as put in place mainly to pursue the joint energy projects with Russia – went as far as to say that Lavrov’s visit could have an impact on the future of the Oresharski cabinet.

“If the decision has been made in Moscow to postpone the resignation until the clouds over South Stream disperse, I would not exclude the prospect of this government making an U-turn and saying it would not resign,” Minchev told Bulgarian National Radio.

(Russian foreign minister Sergey Lavrov and Bulgarian Prime Minister Plamen Oresharski meet in Sofia on July 7 2014. Photo: government.bg)



Alex Bivol

Alex Bivol is the Deputy Editor-in-Chief of The Sofia Globe.