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21st Jul 2018

US to help Bulgaria reduce dependence on Russia

  • Kerry (c) looks at frescos in Bulgarian church (Photo: state.gov)

The US has promised to help Bulgaria reduce energy dependence on Russia, as Europe digests Gazprom’s latest announcement on EU gas supplies.

Secretary of state John Kerry, on a visit to Sofia on Thursday (15 January), said he will post a US envoy on energy security to Bulgaria and mobilise the Export-Import Bank of the United States to help pay for investments in nuclear energy, liquid gas, and gas interconnectors.

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He also said he’s urged EU institutions to provide “rapid European … commitments to try to resolve this energy challenge”.

He welcomed Bulgaria’s decision, last year, to halt construction of Russia’s South Stream gas pipeline.

“I know the people of Bulgaria are anxious about what the meaning is in the aftermath of the South Stream decision … that’s why we’re deeply committed to helping your government, which has made difficult decisions, but we think strong decisions”, he told press after meeting PM Boyko Borisov.

With Bulgaria relying on Russia for 100 percent of its gas supply, he added: “the importance of diversifying the energy supply – that is not directed against any country [Russia]. It’s simply a reality. No country in the world should be totally dependent for its energy supply on one other country”.

But he warned Moscow, which has strong ties in Bulgaria’s business and political elite, not to meddle in its internal affairs.

“Whether or not Russia were to choose, for whatever reason, some other form of retribution [against Bulgaria for its South Stream decision] is obviously something to be seen as we go forward”, he said.

“We stand ready … to be supportive of Bulgaria in this time of economic and security challenge.”

He also urged Bulgaria to do more to fight corruption in order to protect its sovereignty and to attract foreign investors.

“It’s about providing the climate for investment and shielding the country from those who exploit the situation to gain undue influence over your choices as a sovereign nation”.

For his part, Borisov welcomed Kerry’s support for US firm Westinghouse to expand the Kozloduy nuclear power plant.

He noted there is currently an environmental “moratorium” on exploration of Bulgaria’s shale gas reserves.

He also floated the idea of external support for Bulgaria to build a gas-trading “hub” on its border with Turkey.

The hub scheme arose after Russia last month said it would build a new pipeline to Turkey instead of South Stream.

The CEO of Russian gas firm Gazprom, Alexei Miller, added in Moscow on Wednesday that when “Turkish Stream” is built, he will divert EU transit volumes from Ukraine - some 80 percent of Russia’s EU gas sales - to Turkey.

Borisov noted the hub idea is relevant only “if, of course, that project that we’re hearing about between Turkey and Russia comes to fruition”.

His comment reflects widespread scepticism the Russia-Turkey pipeline will come to be.

For its part, the European Commission said on Thursday “at this moment this is an expression of intent, we need to study this further”.

Andriy Kobolyev, the CEO of Ukrainian gas distributor Naftogaz, went further.

He said the Turkish project “makes no economic sense”.

“It would abandon a perfectly well-functioning and reliable system in favour of investing billions of euros into a new one – a cost that would ultimately be paid by European households and businesses”.

“This threat is a political bluff.”

Turkish silence

Ukraine’s EU ambassador, Konstantin Yeliseyev, told EUobserver that Turkey also appears sceptical: “What’s important, is the Turkish reaction [to Miller’s announcement]. Until now, the Turkish side is silent”.

The silence continued on Thursday when the Turkish PM, Ahmet Davutoglu, met press and EU officials in Brussels.

He said nothing on the Russian plan, noting only the EU should open the energy chapter in its accession talks the better to discuss the situation.

“It's very strange", he said, that the chapter, which is being blocked by Cyprus over a decades-old territorial dispute, remains closed.

A Turkish source, speaking on condition of anonymity, said the Russian pipeline is unlikely to be built because Russia can’t afford it.

He added that if it is built, onward shipments of Russian gas into the EU would still be subject to EU anti-monopoly laws - the same reason Russia abandoned South Stream.

“Frankly, nobody in Turkey is taking it very seriously. People aren’t holding their breath,” he noted.

“In the present climate, the Russians feel isolated. So they have the same reflex as the Iranians used to have - to announce some kind of new project with Turkey, and the whole idea is to show they still have international partners”.

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