Destiny of South Stream

The opposition is developed around construction of the South Stream gas pipeline. According to the European Union, the project doesn't correspond to the "Third Power Package" of the EU. In this regard, delays of construction works in Bulgaria and Serbia are possible, especially concerning Bulgaria. A procedure about violation of the European legislation was started on June 4 . Bulgaria is the nodal country for the project – a construction delay at this site will cause serious delays in implementing the project as a whole. There were even messages on suspending the project in Bulgaria and Serbia, which were nevertheless officially disproved by both countries.  Yuri Stankevich, Deputy Chairman of the Committee on Energy Policy and Energy Effectiveness of the RUIE, Pavel Zavalny, President of the Russian Gas Society, Deputy Chairman of the State Duma Committee on Energy, and Vyacheslav Kulagin, Director of the Center for the World Energy Markets Studies of the RAS Institute for Energy Studies, tell why the European commission suggests blocking the project of the South Stream pipeline and settlements for Bulgaria and Serbia on the matter. Yuri Stankevich noted, "The positions of Bulgaria and Serbia are not independent. They don’t hide that they are following decisions which are made by the European Commission. We understand the reasons for the decisions. It is a formal contradiction of the contract on construction of the South Stream with the requirements of the Third Energy Packet of the Energy Charter, which requires separation of producers and sellers of gas and owners of pipelines, according to the authorities of the European Commission. However, I believe the project cannot be shut down, as there is a need for Russian gas supplies to Europe, there is a demand for it. So the current period of tension will be replaced by talks. I think all sides and participants in the project will make decisions which will be mutually favorable." According to the President of the Russian Gas Society, Deputy Chairman of the State Duma Committee on Energy, Pavel Zavalny, "Both Bulgaria and Serbia depend on Russian gas more than other countries of the EU. They have no other sources of gas supplies, they cannot be replaced, there is no alternative. That’s why they declared readiness to continue construction of the South Stream to provide their own energy security and safe gas supplies from Russia. At the same time, under pressure from the EU and the USA, they had to say what they have said. Time will tell whether they will really do it or not. I hope they won’t do it, but there is information that a political decision has been made that construction of the South Stream should be postponed till settlement of the issue in the EU." Director of the Center for the World Energy Markets Studies of the RAS Institute for Energy Studies, Vyacheslav Kulagin, told that obviously it is political pressure from the European Commission. Probably not only the European Commission, but also the American side, as the statements followed certain meetings with American representatives. Of course, here we can see that politics is prioritized over economics. I believe talks are necessary in the situation. It is not simply a project which has been discussed for a long time; it is a project which is already being implemented. This is a project in which investments have been made. I mean not only pre-project materials, but also real construction. It is impossible to stop it now. Who will pay for the lost investments?

The opposition is developed around construction of the South Stream gas pipeline. According to the European Union, the project doesn't correspond to the "Third Power Package" of the EU. In this regard, delays of construction works in Bulgaria and Serbia are possible, especially concerning Bulgaria. A procedure about violation of the European legislation was started on June 4 . Bulgaria is the nodal country for the project – a construction delay at this site will cause serious delays in implementing the project as a whole. There were even messages on suspending the project in Bulgaria and Serbia, which were nevertheless officially disproved by both countries.
 
 
Yuri Stankevich, Deputy Chairman of the Committee on Energy Policy and Energy Effectiveness of the RUIE, Pavel Zavalny, President of the Russian Gas Society, Deputy Chairman of the State Duma Committee on Energy, and Vyacheslav Kulagin, Director of the Center for the World Energy Markets Studies of the RAS Institute for Energy Studies, tell why the European commission suggests blocking the project of the South Stream pipeline and settlements for Bulgaria and Serbia on the matter.
 
Yuri Stankevich noted, "The positions of Bulgaria and Serbia are not independent. They don’t hide that they are following decisions which are made by the European Commission. We understand the reasons for the decisions. It is a formal contradiction of the contract on construction of the South Stream with the requirements of the Third Energy Packet of the Energy Charter, which requires separation of producers and sellers of gas and owners of pipelines, according to the authorities of the European Commission. However, I believe the project cannot be shut down, as there is a need for Russian gas supplies to Europe, there is a demand for it. So the current period of tension will be replaced by talks. I think all sides and participants in the project will make decisions which will be mutually favorable."
 
According to the President of the Russian Gas Society, Deputy Chairman of the State Duma Committee on Energy, Pavel Zavalny, "Both Bulgaria and Serbia depend on Russian gas more than other countries of the EU. They have no other sources of gas supplies, they cannot be replaced, there is no alternative. That’s why they declared readiness to continue construction of the South Stream to provide their own energy security and safe gas supplies from Russia. At the same time, under pressure from the EU and the USA, they had to say what they have said. Time will tell whether they will really do it or not. I hope they won’t do it, but there is information that a political decision has been made that construction of the South Stream should be postponed till settlement of the issue in the EU."
 
Director of the Center for the World Energy Markets Studies of the RAS Institute for Energy Studies, Vyacheslav Kulagin, told that obviously it is political pressure from the European Commission. Probably not only the European Commission, but also the American side, as the statements followed certain meetings with American representatives. Of course, here we can see that politics is prioritized over economics. I believe talks are necessary in the situation. It is not simply a project which has been discussed for a long time; it is a project which is already being implemented. This is a project in which investments have been made. I mean not only pre-project materials, but also real construction. It is impossible to stop it now. Who will pay for the lost investments?