Bulgaria has blocked the South Stream

Bulgaria has once again delayed the end stage of the South Stream’s construction. This time, it was the project incompatibility with standards of the EU’s Third Energy Package that has brought the delay. According to Deutsche Welle, the Bulgarian Energy Holding received an order to that effect from the country’s Minister of Economy and Energy Vasil Shtonov.

Moreover, Shtonov ordered the holding to fully cooperate with the European Commission to bring the project in full compliance with European law.

It is well known that the Commission stated its intention to suspend the construction of the South Stream before. In addition, the union authorities now suspect Bulgaria of “violating European rules for tenders for the construction of infrastructure projects” and providing “privileged treatment to Russian and Bulgarian companies.”

The Day asked an expert about this signal’s meaning for Ukraine.

COMMENTARY

Mykhailo HONCHAR, director of energy programs at the Nomos Center:

“Under pressure from the EU, the political forces in Bulgaria, and the US, the Bulgarian government has put the project on pause. Still, nothing would prevent the current opposition which may come to power from returning to the project. Under Boyko Borisov’s Cabinet, the project was also stopped to analyze it. Later on, probably after the ‘right’ people got some compensation for the ‘right’ decisions, that is, ones favoring the project, the South Stream’s construction restarted.

“Ukraine is certainly benefiting from this decision, for the South Stream is the project to eliminate our transit potential. While it is on hold, we maintain the status quo. That is, despite the fact that there has been a definite reduction of transit through the territory of Ukraine in recent years, we continue to be the most important transit link in the supply of Russian gas to the EU.

“However, this raises another question – will the suspension of the project become its cancellation? We do not know it yet. The project has again entered a high-risk phase associated with the aggressive policy of Russia. How it all will end, depends on Bulgaria and the EU. After all, the EU is not completely rejecting the project, although it is contrary to European priorities. They say they do not oppose the project, but it must comply with the European standards, and Bulgaria adopted the same bureaucratic position in this respect.

“However, if the project will comply with the norms of economic legislation, it will be just absurd from an economic perspective. It is such a bureaucratic way of killing it that puts the South Stream on the path of modernization or transformation to comply with the European energy legislation, which Russia opposes. The fundamental question here is how long the Commission will be able to withstand the onslaught of Gazprom which attempts to mobilize support for the project at the level of EU member states’ governments.”