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28 Apr, 2009 17:29

Final OK for South Stream in Bulgaria within 2 weeks

Russia and Bulgaria will sign the final contract to build South Stream across Bulgarian territory within a fortnight. The deal overcomes tensions between the two, including the fee Bulgaria will earn for gas transit.

Bulgaria is finally on stream. At their talks in Moscow, the Russian and Bulgarian Prime Ministers ironed out their differences on the construction of the South Stream gas pipeline.

Vladimir Putin said all these issues were technical. But for Bulgarian Prime Minister, Sergei Stanishev, they seemed to be weightier.

“All the differences that we had are now settled, I’m satisfied that Russia accepted issues that are very important for Bulgaria. Thus by the middle of May we will sign and ratify the agreement.”

Bulgaria has been seeking extra compensation from Russia, in return for connecting South Stream to the Bulgarian pipeline network. And if the devil is in the details, then it was here this that negotiations were toughest, according to Konstantin Simonov, head of the National Energy Security Fund

“Obviously Bulgaria’s main aim is to make as much money as possible on Russian gas transit through its territory. So Bulgaria wants to know how much money will be invested in its economy, what gas transit volumes Russia can guarantee, How much gas Russia will provide for the Bulgarian market and who will own this gas. Of course all these issues are technical but we can hardly overestimate their importance.”

The backers of Nabucco are also trying to lure Bulgaria – as this pipeline, if it goes ahead, would also run across its territory. Market watchers these rival suitors strengthened the country's hand.

Sofia wants to buy Russian gas under direct contract with Gazprom, after it suffered a two-week disruption of gas supplies via Ukraine in January. It has also asked Moscow to make available several billion euros in loan finance to build a nuclear power plant in Belene.