Gazprom announces final nail in the South Stream coffin


RIA Novosti / Sergey Guneev

Europe will have to get gas via Turkey or Ukraine, there will be no direct transcontinental pipeline to Europe, Gazprom has confirmed. It is disappointing news for Bulgaria, which was hoping to get gas directly from Russia, and not via Ukraine.

Gazprom CEO Aleksey Miller made it clear that Turkey, and not Bulgaria, will become the main gas valve between Russia and Europe.

“South Stream is dead. For Europe there will be no other gas transit options to risky Ukraine other than the new ‘Turkish Stream’ pipeline,” Miller said Wednesday, as reported by RIA Novosti.

“Now, the ‘Turkish Stream’ on the agenda,” he emphasized.

EU Energy Commissioner Maros Sefcovic was in Moscow Wednesday to discuss EU energy security and the fate of South Stream with Miller and Russian Deputy Prime Minister Arkady Dvorkovich.

Gazprom’s decision to create ‘Turkish Stream’ will damage to the company’s image, according to the Energy Commissioner Maros Sefcovic.

Ahead of the meeting, Bulgaria expressed optimism that it would reach a solution with Moscow on South Stream.

In the wake of the South Stream closure, the European Commission is supporting Bulgaria’s proposal to build a gas storage hub. At present Bulgaria only has a big enough gas hub to hold 2 months’ consumption.

“I really hope we’ll be able to find the right solution, especially after the visit to Moscow; the right solution as far as the gas hub is concerned or the continuation of the work on South Stream,” Bulgarian Prime Minister Boyko Borisov said in Brussels on Tuesday, Bloomberg News reports.

Russia stopped deliveries to Europe in 2006 and 2009 over disputes with Ukraine.

Bulgaria lost more than 6,000 new jobs and over $3 billion of investment with the cancellation of the project. The country also receives 90 percent of its gas imports from Russia, the majority of which crosses through Ukraine, which is seen as an energy risk.

The parties agreed to hold a future trilateral meeting between Russia, EU, and Ukraine in Sofia.
Aleksey Miller said that transit risks in Ukraine are not over, even though Kiev has managed to pay its debt and resume gas flows, after a 6-month hiatus. At present, Ukraine hasn’t stored up enough in its underground storage reserves, according to the Gazprom head.

Russia pulled the plug on the project to Europe in December after standoffs with Brussels over the placement of the pipeline in Bulgaria, the first land section of the pipeline. It would have pumped 63 billion cubic meters of gas to Europe annually.

Russia will instead build an alternative pipeline using funds and materials intended for the original South Stream project. Europe will have to buy gas at the Turkish border.

Originally published
in the
January 14, 2015

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