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EU demands Bulgaria suspend work on South Stream gas pipeline

02 June 2014

The European Commission has demanded that the Bulgarian government freeze construction of Gazprom’s South Stream pipeline until a decision is taken on whether the Gazprom project meets European legislation, Bulgarian television reported on June 2.

The south Stream gas pipeline - Photo: Gazprom
The south Stream gas pipeline - Photo: Gazprom

The Commission says South Stream does not comply with its rules that prohibit gas suppliers from also controlling pipeline access, and it put the approval process on hold following Russia's annexation of Crimea in March. It also says there may have been antitrust violations in the tendering process for the pipeline laying contract.

South Stream is designed to carry Russian gas to the EU bypassing Ukraine. Gas will be pumped to the Bulgaria’s Black Sea port of Varna before extending overland through Serbia, Hungary, and Slovenia to supply gas to the Western Europe via Italy and Austria. The pipeline’s capacity will be 63 billion cubic metres a year.

Despite the lack of EU approval, Bulgaria had decided to start construction of South Stream as a national priority. The country is heavily dependent on Russian gas and wanted to ensure security of supply as soon as possible at a time when supplies via Ukraine were being disrupted following clashes there between pro-Ukraine and pro-Russian forces.

"Whilst discussions with the Bulgarian authorities are taking place and until there is full compliance with EU law, we have also asked the Bulgarian authorities to suspend the project," Commission spokeswoman Chantal Hughes said.

She also said the Commission had sent the Bulgarian authorities a letter of formal notice asking for information, a preliminary step that could eventually lead to full infringement proceedings and possible fines. The Bulgarian government has a month to reply.

While Russia seeks alternative routes for its gas exports, which provide roughly one third of EU gas needs, the European Union is looking for other ways to improve its security of supply. The Commission published a strategy paper last week, which member states will debate later this month.

The paper underlined that any new infrastructure must comply with EU rules on a single energy market, including the so-called Third Energy Package, which prevents the companies, such as Gazprom, which supply gas, from also owning the infrastructure through which it is distributed.

This could also impact Greece, which has expressed interest in building a trunk line from South Stream to supply its gas needs.

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