Bulgaria Suspends Involvement in Russia’s South Stream Pipeline

If Bulgaria pulls out of South Stream, Russia’s design to bypass Ukraine in its gas deliveries to Europe will be jeopardized.

Bulgaria is suspending work on a Russian pipeline that is supposed to connect its gasfields with a hub in Austria, the Balkan country’s prime minister, Plamen Oresharski, announced on Sunday.

“We have received a request from the European Commission, after which I ordered to suspend the works. Further actions will be clear after additional consultations with Brussels,” he said after a meeting with American legislators.

Russia has yet to receive an official notification, officials told its ITAR-TASS news agency. The issue could be raised at a meeting between European, Ukrainian and Russian officials due to be held in Brussels on Monday.

The European Commission put the approval process for the South Stream pipeline on hold after Russia annexed Ukraine’s Crimean Peninsula in March, saying it did not comply with its regulations on ownership and pipeline access.

In May, Russia appeared to have circumvented the European Union by signing a bilateral agreement with Austria where the pipeline is designed to terminate. Austria’s OMV is also a partner in the pipeline with Russia’s Gazprom. So is Germany’s BASF, the world’s largest chemicals company, thoughts its gas supply subsidiary Wintershall while Siemens is contracted to supply the pipeline’s control systems.

South Stream is designed to bypass Ukraine in delivering natural gas to Europe. The submarine part of the pipeline will pump Russian gas to Bulgaria’s Black Sea port of Varna before it extends overland through Serbia, Hungary and Slovenia.

Planned for completion in 2018, the pipeline’s capacity should amount to more than sixty billion cubic meters. It is estimated Russia uses just 60 percent of its present pipeline capacity, however, while its European customers are actively looking for ways to reduce their dependence on Russian gas. South Stream, then, is not so much a commercial as a political project, designed to enable Russia to put pressure on its former satellite state Ukraine by denying it gas while continuing to service its European customers.

The countries in the European Union get roughly a quarter of their gas from Russia. Half of it now flows through pipelines in Ukraine.

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