Gas joust continues as Bulgarian PM comes to Moscow

Bulgarian Prime Minister Sergei Stanishev is in Moscow to settle details over Sofia’s participation in South Stream, with the EU and U.S. thought to be pressing Bulgaria in favor of the Nabucco pipeline.

The Bulgarians are in town to promote all their businesses from tourism – to their ambition to become a European energy hub. At the trade exhibition “Bulgaria Today” the country’s Prime Minister Sergei Stanishev said both South Stream and Nabucco can peacefully run, side by side, across Bulgarian land.

Russian officials travelled to the Bulgarian capital last week – but failed to win their signature on the South Stream project. In his return visit, Bulgarian Prime minister will try to negotiate better conditions, according to Dmitry Aleksandrov, Analyst at Financial Bridge.

“Now Bulgaria is trying to negotiate an additional $100 million in the form of transit fees and securing its companies participation in building the South Stream infrastructure. Sofia is also under pressure from the EU and the United States to reject this agreement with Russia or at least sign it after the Nabucco deal.”

Even after recent declarations of support for Nabucco from various countries the future of the project remains uncertain. Last week Turkmenistan – a country that is regarded as the main gas source for Nabucco – said it’s ready to participate. But no deal has been struck.

Ilya Balabanovsky, Gas Analyst at Unicredit Securities says Ashgabat is reluctant to contract for any gas before it's able to ship it to the EU.

“It a vicious circle. They can’t commit gas volumes to export to Europe because there is no pipeline solution. And Europeans can’t commit to pipeline solutions because they are not sure whether they will be able to secure this gas. The only thing that can break it is when Europeans will come and put $10 billion on the table to build Nabucco.”

In the current economic situation, the EU can spend $10 billion more productively, economists say, and powers like France and Germany are very well aware of it.