SOFIA, Bulgaria—Bulgaria and Russian gas giant Gazprom (IW 1000/16) promised today to catch up on delays and launch work on the Bulgarian section of the South Stream natural gas pipeline by the end of the year.
"No doubt, the first gas on the undersea pipeline from Russia to Bulgaria will flow in December 2015," Gazprom CEO Alexei Miller said.
"The project has been implemented with certain delays from schedule; we are however certain that the deadlines for the start of construction will be met," Miller said after meeting Bulgarian Prime Minister Plamen Oresharski.
Bulgarian Economy and Energy Minister Dragomir Stoynev said that the 2,250-mile pipeline, which is intended to bring Siberian gas to Europe under the Black Sea, remained a key priority for the country.
Bulgaria currently receives all of its natural gas—about 3 billion cubic meters annually—from Russia via Ukraine and has been among the worst hit by repeated Moscow-Kiev price spats in recent years.
"We will speed up work on South Stream, as it is important to diversify our natural gas delivery routes and have direct deliveries from Russia without passing via third countries," Stoynev pledged today. "We need to have final detailed site development plan, environmental impact assessment and front end engineering design by the end of this year and apply for construction permit."
How Bulgaria Will Fund Its Section
Bulgaria's embattled cash-strapped new cabinet however confirmed an acknowledgement made by the previous administration that it did not have the money to fund the 336-mile Bulgarian stretch of the pipeline.
"I want to say clearly that South Stream will be funded on a project principle," Stoynev said. "There will be no state guarantees. No Bulgarian taxpayers' money will be spent for it."
Miller emphasized that Gazprom was ready to provide the total funding of 3.1 billion euros (U.S. $4 billion) for the link and that Sofia will pay the money back by using transit fees once the pipeline is in operation.
In 2010, Gazprom and the state-owned Bulgarian Energy Holding set up a 50-50 joint venture to plan, build and operate the Bulgarian section of the pipeline, which is expected to carry 63 billion cubic meters of Russian gas to Europe annually by 2015.
Gazprom has long tried to negotiate with the EU an exemption from its requirements for granting third-party access to any new pipelines built across the bloc.
Stoynev emphasized today that it is "important to determine the regulatory regime for this project, to see the concrete result of talks on the EU-Russia level."
Copyright Agence France-Presse, 2013