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25th Mar 2019

Bulgaria lobbies Brussels on gas hub project

  • Putin in December announced he was scrapping the South Stream project (Photo: south-stream.info)

Bulgaria wants the EU to fund construction of a gas hub on its Black Sea coast to collect possible supplies from the area and sell them to clients in member states.

Prime minister Boiko Borisov is expected to try to sell the idea to the EU energy union boss, Commission vice president Maros Sefcovic during a trip to Brussels on Monday (12 January).

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He is scheduled to arrive ahead of a senior government delegation including his deputy in charge of EU funding, Tomislav Donchev, and energy minister Temenujka Petkova.

Donchev outlined the plan in a letter to Sefcovic in December, energy spokeswoman Anna-Kaisa Itkonen said.

She said Sefcovic has "assured his support for a common strategy for the development of key diversification and interconnection infrastructure projects in South East Europe including strengthening Bulgaria's security of supply."

“In that context the commission also supports the creation of liquid regional gas hubs,” she added.

Itkonen also noted that representatives from the countries involved in the now defunct South Stream gas pipeline project with Russia will discuss the Bulgarian idea.

Juncker investment plan

Bulgaria wants the EU to fund the storage and distribution facility construction from the €315bn investment plan put forward by commission president Jean-Claude Juncker.

The hub is supposed to be one of the first incarnations of the future EU energy union that Sefcovic is tasked to build.

It should allow member states to jointly negotiate, buy and distribute gas shipments from third country suppliers.

Borisov first tabled his plan at a government meeting in December days after Russian president Vladimir Putin announced his country was scrapping the South Stream project that was meant to pipe Russian gas under the Black Sea to Bulgaria, Greece, Serbia, Croatia, Slovenia, Hungary and Italy.

Bulgaria was dismayed by Putin’s announcement as it had counted on South Stream as an alternative supply route from Russia, which is its sole supplier accounting for 85 percent of its domestic consumption of some 3 billion cubic metres a year.

Sofia considers the only current supply route insecure as it passes across Ukraine which is locked in a conflict with Russia over its restive eastern Russian-populated areas.

Itkonen said the commission recognises that Bulgaria is "particularly vulnerable" when it comes to security of energy supply.

Black Sea deposits

Critics at home ridiculed Borisov’s hub plan pointing out he had no clear idea where the gas would come from.

He however has listed several possible sources: Russia, Turkey and Bulgaria’s own Black Sea shelf deposits that are now being prospected.

Bulgaria lost some €200 million due to industry outages in the space of a month when Russia cut the gas flow to Europe because of a trade dispute with the transit country Ukraine in 2009.

However Bulgaria’s bilateral agreement with Russia on South Stream, as those of all states involved in the project, were in breach of the EU energy market legislation, which requires unbundling of supply from infrastructure ownership, equal access of all suppliers to transmission networks and an independent energy market regulator.

In late 2013 the commission warned the EU countries involved in the project to either re-negotiate their inter-governmental agreements or face legal action on behalf of the EU.

Later the commission agreed to negotiate with Russia on behalf of the states but these talks ground to a halt as the conflict in Ukraine escalated and EU ties with Moscow grew frosty.

Sefcovic has pledged to revive these negotiations. He is scheduled to meet Russian energy minister Alexander Novak during a trip to Moscow, a couple of days after meeting Borisov.

Last June, the commission started a South Stream-related infringement procedure against Bulgaria, which then suspended the project.

An October poll brought Borisov back to power - he said Bulgaria is willing to build the South Stream but only according to EU rules.

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