Several energy agreements were signed during Russian President Vladimir Putin’s visit to Bulgaria. They include deals on the new route for the South Streamgas pipeline and on the Burgas-Alexandroupolis oil pipeline. The latter agreement will set up an international company, with Greek participation, to build and manage the pipeline.
The only problem, finally resolved, posed by the Burgas-Alexandroupolis agreement concerned the deadline for signing it, while Bulgaria’s decision to sign the South Stream agreement was not announced publicly until the day Putin arrived in Sofia.
The 900-km(559-mile) underwater section of the South Stream pipeline, proposed by Russia's Gazprom and Italy's Eni, will run from Dzhubga, in Krasnodar Territory on Russia's Black Sea coast, to Bulgaria, where it will branch off to northern and southern destinations in the European Union. It will supply 30 billion cubic meters of gas annually to Romania, Hungary, the Czech Republic, Italy, Austria and Serbia.
Gazprom, the Russian energy giant, will lay the underwater section of the pipeline jointly with Eni. It will build the line’s onshore extensions with the gas companies of the countries concerned. Construction could begin in 2008 or 2009, and gas deliveries through the pipeline should start in 2013. The project is assessed at more than $10 billion.
The deal to build the Burgas-Alexandroupolis pipeline was signed on March 15 with Greece and Bulgaria. The pipeline will transport Russian oil via the Bulgarian Black Sea port of Burgas and Greece's Alexandroupolis on the Aegean, thus bypassing the Bosporus and Dardanelles.
Once completed, the pipeline will pump 35mn metric tons of oil a year (257.25mn bbl), a volume that could eventually be increased to 50mnmetric tons (367.5mn bbl).
Putin said he was satisfied with the sucessful talks on the Burgas-Alexandroupolis pipeline and South Stream.“I am pleased that the talks have been successfully completed on establishing a design company for the Burgas-Alexandroupolis pipeline, on the intergovernmental a greement regarding South Stream, and on additional gas supplies to Europe via the Bulgarian system, as well as to Bulgaria,” the Russian president said.
According to Putin, Bulgaria wanted to sign long-term contracts on gas supply, “but it was not the only issue on our agenda. We also discussed nuclear power generation projects, economic diversification, and cultural ties.” Russia and Bulgaria also signed a contract for construction of the Belene nuclear power plant, in particular two power units with VVER reactors with a capacity of more than 1000 MW each. Russia's state-owned nuclear equipmentmonopoly Atomstroyexport will build the plant jointly with France’s Areva NP, Germany’s Siemens, Czech Skoda Allians, and US Westinghouse.
The turnkey project, worth €3.997bn, fulfils the European Utility Requirements (EUR).
The parties also signed a cooperation agreement on returning irradiated nuclear fuel from the Bulgarian research reactor to Russia.
The Russian and Bulgarian leaders have given a much-needed boost to the supply of Russian gas to Bulgaria. This is a positive development that will encourage other countries to join the South Stream project. The outlook for the South Stream gas pipeline is much better than for the rival Nabucco pipeline, backed by the European Union and the United States, which will pump Central Asian gas to Europe via Turkey, bypassing Russia.
Vladimir Putin, opening the Year of Russia in Bulgaria, said the two countries “have many more joint projects and initiatives in store.” The Russian president’s visit to Sofia showed that the two countries are advancing to a higher level of interstate relations as well as “direct human relations and ties,” as Putin described it.
First Deputy Prime Minister Dmitry Medvedev, who may become Russia’s next president, said that the signing of major energy agreements signified a breakthrough in bilateral relations.
“An unprecedented number of documents has been signed [in Sofia]. Their importance may be difficult to grasp now, but they will set the pace for our cooperation over the next few decades,” Medvedev said. He added that the results of these agreements will benefit Russia, Bulgaria and the rest of Europe.
