Bulgaria takes a step back on South Stream

Bulgaria is about to suspend such major energy deals with Russia as the South Stream gas pipeline project and Belene Nuclear Power Plant construction, the Russian daily newspaper Vedomosti reports.

In a letter to the country’s Energy Minister, the country’s new Prime Minister Boyko Borisov, who is taking office this week, says the deals concluded by the outgoing Cabinet need to be reexamined by financial experts.

Russia’s energy officials say they have not received a notification from Sofia yet.

The move coincides with the deal signed by the prime ministers of Austria, Bulgaria, Romania and Hungary with Turkey to allow the Nabucco pipeline to cross their countries.

The aim of the pipeline is to reduce Europe’s reliance on Russian gas.

Some analysts believe that transit countries will not be able to combine participating in both South Stream and Nabucco projects.

“I don’t think that we are speaking in terms of threats – I believe Europeans need as many supply routes as possible. And if they have both South Stream and Nabucco they will be very happy,” said Mikhail Krutikhin, editor-in-chief of magazine Russian Energy Weekly.

“But I think transit countries such as Bulgaria, Romania and Hungary will be prepared to accept only one solution,” he added.

The South Stream pipeline is supposed to stretch from Russia’s Novorossiysk to Bulgaria, and further split into two directions – to Italy via Greece and to Austria via Serbia and Hungary.

Bulgaria joined the project in 2008, and in May 2009 a cooperation agreement between Russia’s Gazprom and state Bulgarian Energy Holding was signed.

The South Stream project is aimed at bypassing Ukraine as it proved to be an unreliable transit state. In the most recent notorious twist, it left a large part of Europe without Russian gas last winter.

Both Nabucco and South Stream projects are due for completion by 2015.