Gazprom snubs Bulgaria’s gas hub conference
Bulgarian officials attempted to downplay the absence of any representatives from Russia state-owned gas company Gazprom at a meeting with prospective investors for a gas hub near Varna, while at the same time striking a defiant tone as Prime Minister Boiko Borissov vowed that Bulgaria would not be left out of new gas transit routes.
Borissov’s remarks came during the conference hosted by state gas grid operator Bulgartransgaz in Varna on September 5, at which the company was set to present potential investors with four possible options for its proposed Balkan gas hub. Last week, the company’s chief executive said that 35 entities, including exploration and production companies, international financial institutions like the European Investment Bank and the European Bank for Reconstruction and Development, pension and investment funds, as well as gas transmission and trading companies, had confirmed their attendance.
The comments appeared to come in reply to a statement by Gazprom CEO Alexey Miller, who said earlier in the day that the Russian company was not currently considering any plans to re-route any gas flows from its proposed Turk Stream gas pipeline directly to Bulgaria. Miller said, as quoted by Interfax news agency, that any deliveries to European countries would have to come from the Turkish-Greek border.
Since first proposing the Balkan gas hub in December 2014 – just weeks after Russian president Vladimir Putin announced the cancellation of the South Stream pipeline, which was meant to make landfall in Bulgaria – Borissov has repeatedly said that he was hoping to persuade Moscow to build at least one of South Stream’s proposed four underwater lines to serve as a key supplier for the hub.
“We will not allow Bulgaria to be bypassed and our veto power will be used. When we loyally stood behind Ukraine, as the entire EU agreed to, we knew what we were losing, but our decision was guided by integrity and European norms,” Borissov said. As a result, the EU owed Bulgaria to ensure it was not cut out of gas flows, which would also benefit Europe as whole in terms of diversifying gas sources, Borissov said in a government statement.
Meanwhile, Deputy Prime Minister Tomislav Donchev said that Gazprom’s position was “consistent” in asking for iron-clad guarantees from the European Commission before the company commits to any pipeline projects in the EU. “In that sense, [Gazprom] is not is represented here, but there are enough Russian representatives here that are closely monitoring all messages, especially those from the European Commission,” Donchev said, as quoted by Bulgarian National Radio.
Russia wants to stop transiting gas through Ukraine when it current contract runs out in 2019 and had planned to use South Stream as the main route to bypass Ukraine. After the project ran into opposition from the European Commission for breaching Third Energy Package regulations (which stipulate that infrastructure cannot be owned by companies shipping the gas through the pipelines), Bulgaria put the project on hold, which sparked Moscow’s ire and prompted Putin to cancel the pipeline, re-directing it to Turkey and re-naming it Turkish Stream.
Since then, there has been little development on the project, which stumbled as Turkey and Gazprom quarrelled over the size of the discount Turkish companies would receive on gas prices. The project’s very existence was put in question during the diplomatic stand-off caused by Turkey shooting down a Russian military plane near the border with Syria, but the recent thaw between Ankara and Moscow saw Turkish president Recep Tayyip Erdogan promise to speed up work on the pipeline so that it is completed by 2019.
However, Turkey is only keen on building one of the four lines, each with an annual capacity of 15.75 billion cubic metres, that will ship gas for the Turkish market, and less so the other three lines that Gazprom would use to ship gas for European customers – provided said customers agree to switch their point of purchase from the Ukrainian border, which is far from certain.
Moscow claims that its desire to pursue alternate routes is purely economic, not political, in nature and alleges that new pipelines are needed because Ukraine has proven to be an unreliable transit partner. However, Gazprom staunchly opposes the simplest solution to resolve such “economic issues”, namely moving the point of purchase to the Russian-Ukrainian border.
(South Stream official welding ceremony in Bulgaria in April 2014. Photo: gazprom.ru)
