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High degree of agreement reached on South Stream roadmap

17. July 2010. | 11:15

Source: BTA

"Concerning the roadmap for the South Stream project, we have a high degree of agreement," Bulgarian
Economy, Energy and Tourism Minister Traicho Traikov told journalists on Friday. He took part in Bulgaria-Russia talks on the South Stream natural gas pipeline project.

"Concerning the roadmap for the South Stream project, we have a high degree of agreement," Bulgarian
Economy, Energy and Tourism Minister Traicho Traikov told journalists on Friday. He took part in Bulgaria-Russia talks on the South Stream natural gas pipeline project.

He said the roadmap will set the deadlines and the steps for the preparation of a feasibility study and the setting up of a joint company for the project. The starting point of the future pipeline is relatively clear: it will be near the Bulgarian port of Varna. The next thing to do is to consider the possible routes, the amount of natural gas to be transported and the expenses for the project.

The joint company will be set up and will receive the results of the feasibility study by February 2011, Traikov said. According to the results of the feasibility study, a decision will be made on the possible continuation of the project.

Bulgaria and Russia also discussed the natural gas supply agreements between them. "Until the current agreements expire, some improvement can be achieved on various parameters," Traikov said. Bulgaria stands a chance of achieving better clauses and winning the understanding of the Russian partners, he added.

According to Traikov, Bulgaria is the only European country which has no alternative to Russian gas and cannot "cushion" its price for consumers. "There is a real danger that [Russian supplier] Gazprom, in keeping with its principle not to sell cheaper to any given country, will kill its market, because when Bulgarian industry cannot use the gas and when households stop using the services of heat utilities as they find them more
expensive, then what will happen to the entire gas market? It is in everybody's interest to continue supplying gas, albeit at a lower price," he said.

The alternatives to natural gas are becoming more and more numerous, the Minister said. Liquefied gas is one of them, shale gas is another, and compressed gas is still another, "but it all boils down to the physical capacity of the Bulgarian gas system to use these alternatives".

Traikov did not say how likely it is that the roadmap for South Stream will be signed during the current negotiations and that the prices at which Russian gas is supplied to Bulgaria will be renegotiated. He said the two sides are far apart in their positions on the prices.

Speaking during Question Time in Parliament, Prime Minister Boyko Borissov expressed hope that a long-term reduction of the price of natural gas will be achieved at the two-day negotiations. He was answering a question of Coalition for Bulgaria MPs Sergei Stanishev and Peter Dimitrov concerning the energy projects.

The Bulgarian side is trying to understand why there are three-four intermediaries along the pipeline, according to the Prime Minister.

Later, Borissov said that the transit fees will be preserved with the signing of [the roadmap] for South Stream but did not want to comment on more conditions Bulgaria will uphold before Russia.

The more gas pipelines pass through Bulgaria - the better, he commented. This would bring more transit fees for Bulgaria.

The Prime Minister said natural gas is the Fuel of the future, for which reason precisely even Russia did not insist on the Bourgas-Alexandroupolis oil pipeline project. Borissov again remarked that both Nabucco and South Stream have their place on Bulgarian territory and their implementation is supported by the
government.

As regards Bourgas-Alexandroupolis, Borissov noted that if Bulgaria unilaterally gives up the project it will be penalized.At the same time he added that the government has united around the preference of the people from Bourgas region. The project is not beneficial for Bulgaria as the ecosystem will be destroyed in the name of 35 million leva, Borissov stated.

As to Belene N-plant, the Prime Minister said that in a telephone conversation with Russian Prime Minister Vladimir Putin they agreed to find European investors to participate, albeit with small shares, in the project. Borissov has also talked with Serbian President Boris Tadic and the Serbian side has shown interest as this will guarantee the market, Borissov explained.

Taking a reporter's question in Ihtiman on the energy negotiations between Bulgaria and Russia, President Georgi Purvanov said that everybody should be helping and rooting for the government and that any contradictory statements could undermine Bulgaria's position. The head of state said that although these are tough negotiations, Bulgaria has its arguments and leverage to solve the issues. The President commended the government for taking up a stand against the gas intermediaries as a way of bringing down the price of natural gas. Purvanov said that both the government and the opposition have rallied behind the idea, adding that most probably the price of natural gas will be tied with the agreement on the South Stream project.

The Bulgarian delegation to the negotiations on South Stream, which are under way at the Euxinograd Residence near Varna, is led by Minister Traikov and includes representatives of his Ministry and of the Bulgartransgaz and Bulgargaz companies, as well as of the Bulgarian Energy Holding. Russia is represented
by Energy Minister Sergei Shmatko, accompanied by experts from his Ministry and representatives of the Gazprom and Gaspromexport companies.

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